As I write this, we’re right in the middle of the COVID-19… crisis? Situation? Quarantine? Whatever you want to call it, we’re all living it.
Predictably, a lot of business activity has paused. With many businesses forced to shut down for a few weeks, it’s only normal that some companies put expansion or improvements on hold for a bit. At least until they see how things will shake out.*
*Side note: I personally feel the recovery will be, to borrow a movie title, Fast and Furious.
And while no lender (or equipment seller – more on this in a bit) is unaffected by this, I have noticed a distinct new business borrower who has suddenly come out of the woodwork: the successful “we have money in the bank and an excellent credit score” company that doesn’t need equipment financing, but is doing it right now to preserve their cash reserves.
These new finance-seekers are companies that, in general, are still operating right now, historically have fast-timed receivables (they get paid quickly for their product/service), and have ample assets in the bank. And in the past, when they needed new or used equipment, financing is not the way they bought it – they simply paid cash.
But right now, they would feel better using borrowed funds for needed equipment purchases, make monthly payments, and keep their cash in the bank. I’ve talked to a few of these new customers over the past two weeks, and most of them had the same thought, which was generally “we’ll keep our money, but still get the equipment now”.
I like hearing this, because whenever I talk about the advantages of equipment financing, it’s almost word for word what these new customers said: “get the equipment now while keeping your cash reserves in the bank for other things”. So it’s nice to see companies doing exactly that (see, Fletch knows what he’s talking about.)
One addendum to this: equipment sellers, be aware of this new type of buyer. Because while they may have paid cash in the past, they are now looking to finance. Are you offering a monthly payment option? If not, visit https://vendorprograms.crestcapital.com – it’s easy and free.
Oh wait – one more addendum: hopefully these “new to financing” companies will now see that financing equipment is a good business strategy ANYTIME, and not just when we’re under quarantine. Bottom line: buying equipment via monthly payments always plays out well (and wait until they use Section 179 – boy will they be happy!)