If you read this blog, you’ll see I hit this topic a few times because I feel it’s an essential part of any business. But what spurred me to write today was reading an old blog from five or six years ago about always selling on a payment. 

I believed it wholeheartedly then, and I believe it now. Saying “You can have this for $1326 a month” is a lot easier to take than “It’s $75,000. Will that be cash or check?”

You can think whatever you want about auto dealerships, but they are the absolute masters of closing sales. And they learned the ultimate lesson decades ago: always sell on a payment. Always. 

Of course you will get that one customer who doesn’t need financing and wants to know the total cost, but the fact is almost everyone else buys a vehicle on a payment. 

It’s the same with your company and what you offer. Even if your customer doesn’t ask you about financing, I promise you a considerable percentage of them, likely well over 90%, are thinking “monthly payment”, even if they say nothing to you about it. They are going to Crest Capital, they are going to the bank, they are going to their rich-but-obnoxious uncle… they are going somewhere, and will make monthly payments.

But there’s another customer you never got to really talk to. Know why? They ultimately bought from your competitor because your competitor made it easy. Your competitor made it so they didn’t have to go to Crest or banks or uncles they really can’t stand… your competitor partnered with someone (maybe even us) to offer equipment financing right there at the point of sale.

Your competitor understood that offering financing cost them nothing. Your competitor understood that offering financing was ridiculously easy, and it involved no work on their end at all. Your competitor had “only $XYZ a month” right on their website. 

Your competitor made the sale. You never even had a shot.

Compete better. Offer financing. If you need help, we’re ready.

Are you doing it? If the answer is yes, how much do you promote it? Because I have to tell you, over the years (and I know I sound like a broken record), I have seen it make a tremendous difference in the bottom line. In plain terms, offering financing closes more deals.

Now for those who are uninitiated, when I say “offering financing”, I don’t mean your company financing anything. I mean taking advantage of the free vendor financing program from Crest Capital that allows you to offer financing at no program fee and typically no credit risk to you — standard program terms apply. All you do is sell your goods like always, except you can also say “we offer financing”. Then we handle the financing part, and you get paid in full right away, like you always did. 

It’s simple, clean, and extremely effective.

It becomes even more effective in an apples-to-apples comparison with your competitors. If you offer financing and your competitor doesn’t, you automatically make it much easier to buy from you. Your customer doesn’t have to get their own financing (or use cash). You’ve also taken the “we can’t afford it right now” rebuttal off the table.

I mentioned earlier our program is free. That’s no joke – you don’t pay a penny for this. In fact, we’ll even brand it for you – supply us with your logo/artwork, and we’ll make you a professional, secure online portal that your customers can use on demand. And we’re fast too – in many cases, your customers can even get  financing approval before the sales meeting is over. Indeed, we’ve approved financing deals within hours, even from the trade show floor – a deal was made, lunch was ordered, and before the last sandwich was finished,  the financing was secured. Oh, and your customers will love our rates and terms too. 

So I ask you one more time: it’s summer 2023. Are you offering financing yet? 

Here are a few specifics that we engage in with our finance partners who want to get more out of their financing program. First are two options that every partner has access to:

Widgets and a Custom Payment Portal.

A “get financing here” widget can be inserted into your website in seconds (it’s just a quick snippet of code). But the results can be profound. Prospective buyers looking at your goods can click to get payment info and apply for financing.

The custom portal is similar in that it’s easy to deploy. For portals, we can brand them with your name/logo, and can include a custom vanity URL. Prospects can enter in finance amounts, get quotes emailed to them, and even apply for Crest Capital financing directly from your portal. It’s a fantastic addition to any sales effort.

Ok, those are the common tools. But the following strategies are more advanced, and are selectively available to specific partners (e.g., those who prolifically utilize financing, and are willing to work with us as much as we work with them.)

“No Payments Until…”

Pretty self-explanatory. The option to defer payments until later can be an attractive one for buyers. We’ve done skip first payment, no payments until summer, no payments until next year… these can be customized depending upon our partner’s needs.

Seasonal Payments 

Many businesses operate seasonally. Examples include a golf course in the northeast, a ski resort, or any other business that has high and low seasons dependent on climate, seasonal tourism, the calendar, or similar. If you sell to customers like these, the ability to adjust payment schedules depending on the season could easily be the deciding factor to buy from you. We can make that happen.

Progress Payments

For many industries (especially those that provide customized goods), progress payments are a key part of operations. If you provide goods that require progress payments, we can work with you to ensure your financing program meets those needs. 

There are other advanced strategies, such as custom lease structures, special rates, creative marketing collateral, and more that we work with advanced partners on, but the preceding should give you a good idea what’s available. 

Again, these advanced strategies require partners to be experienced with offering financing, and in some cases, willing to assume some of the risk. But they can be extremely robust to the bottom line. 

Financing makes companies money – it’s as simple as that, and if you’re already a practitioner, upgrading your financing program to Crest Capital can make a big difference, both today and tomorrow. 

For example, I posted a “why aren’t you offering financing?” series in January of 2020. Just one month after I posted, we began hearing about a possible Pandemic. Then a month later, the pandemic happened. And you know what else happened? Credit exploded. With shutdowns looming, companies did not want to spend a dime of their own money, so they borrowed and financed equipment in droves. 

Like everyone else, we worked from home, but were quite busy. And you know what took up a TON of our time? Helping our best vendor partners better offer credit to their customers.  

We have hundreds of vendor partners. Every one of them is important. But there are a certain percentage of them who truly embrace offering credit and monthly payments, and use financing as a selling tool. They already know, beyond any doubt, that offering credit raises sales. So they proactively employ it.  

For those vendors, our help was there for the asking. We worked with their salespeople, helping them better present financing. We assisted with marketing collateral. We worked out “as low as” price points for their websites. And for the most prolific ones, we worked out special payment schedules and similar. 

This all mattered immensely to our best B2B vendor partners. When the pandemic hit and business seemed quite “iffy”, we helped them take advantage of the sudden increased interest in credit, and for a great number of them, sales held serve during a very challenging time. 

So this begs a question to companies who already embrace offering credit: How much does your finance partner actually help you?  

At Crest Capital, we see it as a true partnership. A two-way street if you will. 

Many vendor partners don’t really want to push credit, and that’s ok. We give them some self-service tools, and financing is there if they need it.

But there are other vendor partners who proactively view credit as a vital sales tool (which it is). And together, we do some interesting, revenue-driving things. 

Do you have a vendor partner now, but haven’t seen much interesting (or revenue driving) lately? Maybe it’s time to talk to a vendor partner that actually does those things. 
I’ll discuss specifics in the next post, but suffice to say, if you’re interested in more revenue from your financing program, then we’re interested in talking to you.

But the important one is rates. I mentioned back in January that rates will likely rise all year, and that has been spot on. If you were thinking about financing equipment in 2022 and locked in a nice fixed-rate, you’re in good shape.

So here we are, well into the third quarter of 2022, and I want to say that even if you didn’t get in before rates rose, it’s not too late. Because even though rates just went up again, I predict rates will continue to rise for the balance of this year, and well into the next. 

Now this is hardly an outlier prediction. Most economists and experts who watch this a lot more closely than I do are saying the same thing. That said, hopefully the biggest hikes are going to plateau soon, and then we’ll see some smaller ones. And then we’ll see a leveling off, where rates will probably hold steady for a while.   

What this means to you, dear reader, is this: for the next few quarters, whatever the rate is today is as low as it’s going to be for quite some time. If you are looking to finance equipment or borrow money in any way, NOW IS THE BEST TIME. 

Now some more good news, and this is from a big picture perspective sense: No matter what happens to rates, they will still be quite low in a historical sense. I talk to some older executives who recall borrowing at much higher rates in the 1990’s and being happy with it. And even in the early 2000’s, rates were nearly double what they are now. Just food for thought.

Anyway, there’s my prediction for the rest of 2022 and into 2023. Borrow now to get your best rate, with “now” being almost anytime in the next year. But of course, the sooner the better. 

Now, let’s go Mets!

Most of you would say $5,000 right now, which is the correct answer. There are a lot of reasons why most people feel this is the correct answer. One reason being $5k now gives you more options today; another reason is we have no idea where we’ll be in five years, so take the $5k now.

But to me, the best reason is TVM, otherwise known as the Time Value of Money. In plain terms, the theory is money today is always worth more than the same amount of money tomorrow.

The primary reason for this isn’t based on complicated economics or the value of the dollar or whatnot – it’s simply due to compounding periods. Giving me $5,000 now theoretically allows that $5,000 to grow upon itself. So if I had a time machine, I could jump forward a few years and see that my “past” $5,000 is worth more than “right now” $5,000.

**Full disclosure – If I had a time machine, I would not be using it to check my bank balance. I’m not that boring. 

So let’s talk about money now as opposed to money later for businesses. The best example I could give you is taking a full Section 179 deduction, as opposed to yearly depreciation.** Taking a deduction on the full purchase price of equipment right now allows you to put that sum to work for you. The money you save/keep is going to be worth more than a like amount years from now. And it’ll be worth more than a little at a time for years. 

This goes double when you finance a Section 179 purchase. You get the deduction, and you also keep the money the equipment would have cost you in the bank, and instead make payments. TVM works for you here too.

Give me the money now as opposed to later. Section 179 does exactly that. And TVM makes it even better.** Note: of course, always discuss with your accountant or tax professional.

I’m not going to pretend I’m not influenced by that either – in this very blog I’ve recently been discussing shortages (both in materials and labor), rising inflation, rising interest rates, and similar. Of course, I try to put an equipment financing spin on it, but still, the overall tone is sometimes more influenced by the negative than I’d like. So let’s change that for a post.

I was on Facebook yesterday, and saw some posts from a friend who owns a tree service company. My friend is quite successful – he started more than twenty years ago with a chainsaw and some secondhand tree climbing gear, and through hard work, he now has 40+ employees, about 15 vehicles/pieces of heavy machinery, and is the name for tree service in his area.  

And he was posting this past Sunday evening about his new (financed) chipper, showing videos of this thing just eating full 50’ trees, pulling them in and turning them to mulch in a minute flat.  Also in this video was his new smaller crane (also financed) that picks up the cut trees and moves them into chipping position.

But what really struck me was not the equipment, After all, he’s been financing tree equipment for years, and it’s helped fuel his growth. What made me take notice  was he and the 12 other guys in the video were working on a Sunday. 

I reached out to him and asked him how business was. He said he has never been busier. Here in 2022, with inflation, shortages, rising rates, etc. And he said something that really resonated with me: People still need things done. Except now, there seems to be fewer companies to do them. 

In my friend’s case, one of his competitors hung it up last year, fed up with rising labor costs and his help leaving because they found better-paying jobs. My friend adjusted and continued to pay competitive wages. Yes, he had to raise his prices a little, but he’s hardly alone. And him raising prices for his services has not mattered in his phone ringing – again, people still need things done.  Storms still happen. Trees still fall. And you need both skill and the right equipment to do the job. And he has an ample supply of both. He was already the biggest guy in town, but he still puts in the work. Because he knows success is no accident. 

It doesn’t matter what your industry is: I’m writing about a tree service here, but I’m pretty sure that most industries have seen a shift – either in a reduced service level, delivery times, etc. There is always opportunity for someone to put the work in on a Sunday because nobody else can (or will).

I’m pretty sure you have noticed how the marketplace has changed over the past two years. Supplies are short, and waiting times for needed equipment have increased. 

This “shortage of equipment” has led to an increase in used equipment purchases. Many companies who never considered buying used equipment before are now moving in that direction. 

This has done three things to used equipment:

The first is, it has made used equipment quite necessary to many companies. Depending on the type of equipment or vehicle needed, many times a used model is the only choice. 

The second thing it has done is make used equipment scarce. We even heard of a business owner driving all night to be first in line to get a choice piece of used construction equipment. There were a few disappointed people behind him… 

The third thing is used equipment is now quite valuable, with high quality, gently-used models going for a sometimes higher-than-normal price.

So What Are Crest Capital’s Reasons to Finance Used Equipment in 2022?

As I mentioned in the beginning, we give our customers some distinct advantages when it comes to financing used equipment.

The first is our great rates. In fact, our rates are the same for used equipment as they are for new. This is a major departure from almost every other business lender out there. Because of scarcity, you will pay more for a piece of used equipment than you did two years ago, so it’s beneficial to have a lender who can cut you a break on the rate, huh? 

The second is our speed. Since used equipment can get snatched up fast, the last thing you need is your lender dragging their feet. We don’t – we move fast, so you can get what you need when you need it.  

Thirdly, we will finance soft costs. This is very important with used equipment, as warranties and maintenance agreements are smart purchases with used equipment. In fact, a full 25% of your used equipment loan can be soft costs, so feel free to also finance the warranty, taxes, delivery, etc. 

Used equipment matters in 2022, and financing it makes a ton of sense. If you’ve even remotely thought about it, take a look at how much a used equipment monthly payment will be, and let us know if we can make it happen.

Business is all about providing good products and services that are of value to your customer base. But competition is always going to exist – everything you do, your competitor will try to do better (and vice-versa). It’s almost like a sibling rivalry.  

One day, a company is having a meeting, and the VP brings in a brochure for a piece of equipment that will allow them to offer a service they previously could not. For purposes of illustration, let’s say it’s a construction company getting a new hydraulic concrete pump that’s capable of higher reach than most others in the immediate area. And the company strongly feels the area is poised for growth… including vertical growth.

During the meeting, it’s decided that it’s a calculated and worthy risk – based on potential growth, offering this improved service locally will put this company squarely in the sights of developers moving into the area and constructing new facilities. They can cite their increased capabilities when they present a bid, which is always a nice caveat.

One issue – this is a bank account draining purchase. And you know what I’m going to say now, right? Fast equipment financing to the rescue.

The previous example is probably a bit over-simplified, but the general theme is incredibly valid. Companies venture into new areas of service (or product offerings) all the time. And quite often, it’s done stealthily – you want your competition to be as surprised as your market is delighted. Because if you get there first, you will enjoy a time where your competition must play catch-up (if they even can… sometimes they say “ok, let them have that market segment”).

And in the course of these meetings and strategic planning for growth, the most preferred way to get the equipment for any expansion is to finance it. This allows the new equipment to pay for itself over time – in fact, in most cases, assuming the company was right and the new offering is a hit, paying for itself is almost assured. 

Making a bold move to expand your offerings is part of business. And equipment financing is an important part of that.

No matter what industry we are in, we always keep an eye on our competition. Which is smart – while we all like to think we’re “it” in terms of our industry, that isn’t true, and not only does your competition exist, there will be customers who prefer them. It’s normal.

But one thing that isn’t normal, and can be prevented, is someone preferring your competition because they have superior equipment and can offer more / better / faster service. 

Let’s use a simple example: we have two competing tree services. They both offered the same general services – they have bucket trucks and guys who climb. They both have nice chippers and dump trucks. Pretty even.

Then one day, one of them gets a large telescoping crane – a crane capable of plucking a full (cut) tree out of a backyard and bringing it out to the street – all without the wheels ever touching the property. Yes, this is a thing.  

That’s a HUGE service advantage. To remove a backyard tree, the company with the crane can largely leave the entire property unscathed. Plus, the job can be completed much faster. 

The company without the crane has to drive the bucket truck into the yard (messy), manually cut limbs (messier), and drop them into the yard (messiest of all). No matter how careful the “crane-less” company is, the yard will have scars. Plus, the job takes much longer as well.

So, once customers know this, who do you think gets the call from higher-end jobs where limited property damage is extremely important?  

The company without the crane, if they want to keep pace, needs their own crane, and they need it fast. And unless they have cash burning a hole in their pockets, financing a crane is what they must do. And there you have it.

If you get wind of a game-changing move by a competitor, and this move involves a piece of equipment you don’t have, fast, fixed-rate financing is the way you can even the score quickly and decisively. Take advantage.