Mel was a guy I knew at one of my old jobs way back when. In fact, Mel was the head of accounting. I was in purchasing or something like that (I didn’t have a defined department or anything – I was more or less an assistant to an assistant, which meant I got shuffled around a lot.)
Anyway, Mel was a mean guy. And he HATED anything that would make his job more complicated. So whenever someone made a deal or bought something that would require some accounting work, they sent me to tell Mel. And Mel always yelled when I came in with news that we purchased something that required up-front payments or a bank loan (yes, there was a rhyme to the effect of “send Fletch to tell so we can hear Mel yell”… ha ha guys, hilarious).
Anyway, my point here is, Mel, like all accountants, doesn’t like it when cash gets drained. He also didn’t like it when we financed stuff on revolving terms (like banks want). And he disliked re-qualifying for a loan every year (as banks want). But most of all, he hated it when the entire loan balance was reported as a current liability (like a revolving bank loan needs to be) as opposed to a long-term debt on the balance sheet.
Too bad I can’t go back in time, because Mel would have LOVED working with an equipment financing company. Fixed terms, no re-qualifying, and most important, only the current portion of the long term debt shows as a current liability on the balance sheet. Instead of yelling, Mel would have probably given me a cookie. And I like cookies. Heck, I would have volunteered to go tell Mel we bought something through an equipment financing company.
Do yourself a favor. Make your “Mel” happy by using an equipment financing company. Maybe you’ll get a cookie too.