I often talk about the advantages of financing equipment with an equipment financing company over the bank. One key advantage is that we do not require blanket liens or minimum balances kept in the bank. The lack of these two particular restrictions on an equipment loan allows companies to be very nimble, and get more financing quickly and easily if they need it.
And sometimes, they need it without warning.
The obvious “without warning” need is a machine breaking down, or some kind of accident. But let’s leave those out, as they are pretty obvious. Let’s talk about some other less-obvious instances that could bring on the need for more equipment very quickly.
I’ve known customers who were happily chugging along, when one day, a sales rep calls in with a new account that changes everything. All of a sudden the volume goes way up, and a company that made 200 widgets a day all of a sudden needs to make 300. There’s little upside to turning away this new business, so the company needs more equipment fast.
Here’s another instance I remember: there was a local waste hauler in a county where new people were elected, and very quickly, they passed new recycling laws. All of a sudden, the hauler needed new bins for people’s homes, and new sorting machinery would help a lot too. Rumor quickly became law, and everything was turned upside down in a matter of days.
Both of these types of changes mentioned can be planned for if seen coming, but sometimes they hit like a bolt of lightning. One new customer who’s very eager to get started, or one election with new, engaged people taking power, and everything can change for a company. So they need financial flexibility, and they need to be able to pick up the phone (or go online) and get the equipment financing they need quickly.
And they can’t do that if they are bogged down with restrictions from a previous bank loan.
In the end, it’s a very empowering feeling to not only have financial flexibility, but to also know you can get fast equipment financing on demand (almost literally). Being unfettered by restrictions does this. So choose your equipment financing partner wisely.