The COVID-19 pandemic created a dilemma for many businesses: They may want to postpone equipment purchases to reduce expenditures and reserve cash, but, at the same time, many need to upgrade to new equipment and technologies to stay efficient, productive and competitive. Equipment financing may make it possible to get the best of both worlds and avoid large, upfront expenditures while providing your business with the equipment necessary to keep your operation running smoothly.
According to the Equipment Leasing and Financing Association, “78% of U.S. businesses across all industries rely on financing equipment purchases through loans, leases and lines of credit.”
Equipment financing can cover a wide range of business equipment, including manufacturing and assembly machinery, transportation equipment, construction equipment, medical equipment and information technology purchases such as software, servers and more. For smaller-ticket items such as office equipment, we can offer leasing through our affiliate Highland Capital with a simple and rapid turnaround.
Now, when liquidity and access to capital may be limited and/or time consuming, financing equipment may be a preferred path for flexible terms and quick execution. Here are five of the key benefits:
- Stay ahead of the competition: The pandemic acted as a catalyst for innovation and advancements in technology, and many businesses had to accelerate their digital transformation efforts to stay in business. Organizations that don’t stay up to date with the latest innovations in their industries can lose their competitive edge and risk being left behind. With equipment financing, you can invest in your future without burning through the cash you need today.
- Be more resilient: Old, outdated, slow or malfunctioning equipment can drastically reduce your efficiencies, productivity and, ultimately, revenue. By financing the equipment you need quickly, your organization will be set up for success and better able to adapt to changing market conditions.
- Reduce your upfront investment: The recent crisis took everyone by surprise. Even if you budgeted for equipment leases or purchases, an unexpected decline in revenue or growth may make those expenditures seem unattainable. With an equipment loan, you can avoid upfront, lump sum payments and instead pay small monthly payments while benefiting from the latest machinery and materials.
- The asset you are purchasing acts as collateral: Equipment financing is handled separately from you working capital and real estate credit facilities. The equipment you are obtaining acts as its own collateral, making it easier for businesses of all sizes to procure a loan.
- Refinancing your existing equipment assets can reduce debt service and simplify your payment structure: We can evaluate your current equipment debt rates and structure as well as current asset values and design a simplified bulk refinance that can save on monthly debt service obligations. In addition, this can streamline administration of many different notes with different payment dates to different creditors throughout the month into one monthly payment, allowing you to more easily manage your cash flow. You may not be aware that if you have taken advantage of certain dealer/vendor financing, the debt may be showing up on your personal credit report. A group refi can clear that up.
Bottom line: If your business needs to keep expenditures low but still wants to stay on the cutting edge, equipment financing might be the answer. Contact Valley to learn more about flexible terms, fast-turnaround and options available through Valley Commercial Banking and Highland Capital Corp.
Valley Bank in New Jersey is here to help. We can provide your company with the financial services and advice you need to ensure that your business recovers today and thrives tomorrow. To learn more, contact Marcia Koch at 908-561-7122, ext. 5254, or by email at mkoch@valley.com.
