All posts by : Brenda H.

Credentials are critical in the professional world as a means to verify competency. After all, you wouldn’t go to an attorney, doctor or accountant who didn’t meet professional standards. Same goes for your equipment financing lender.

One of the easiest ways to determine whether you’re dealing with a professional lender is by checking if he or she is a Certified Lease and Finance Professional (CLFP). CLFPs must pass various tests and meet strict professional and ethical requirements to become officially certified, making them more reliable partners than non-certified lenders.

If you want to work with a finance professional who has gone the extra mile to earn a designation, then you should seek out a CLFP. High standards required to use that title ensure that the person or organization that you work with will use their expertise to act in your best interest.

What is a CLFP?

A CLFP is a lease and/or finance professional that has attained this qualification by demonstrating their knowledge, professionalism and ethical practices. As a whole, the CLFP organization aims to improve the equipment financing industry by improving companies’ and individuals’ conduct and expertise.

This certification intends to promote professionalism, transparency, and ethical practices in an industry. CLFPs aim to enhance the finance industry’s standing by promoting high ethical standards, continuing education and fair practices.

Who Qualifies as a CLFP?

To become a CLFP, you must undergo an extensive application process that includes various tests and background checks. To even be eligible to become a CLFP, you must have a clean background that is free of criminal charges, official sanctions or license revocations. Then, if you meet those prerequisites, you must then pass an exam that tests your knowledge of relevant subjects, including leasing law, accounting, collections and asset management.

LEARN MORE: Your Approach to Financing an Equipment Lease Matters

If you pass the test to become a CLFP, you must then pledge to abide by the organization’s Standards of Professional Conduct, which promotes honesty and integrity in doing business. Members must also renew their status annually, and in order to do so, they must continue to meet all of the CLFP’s standards and participate in continuing education.

The Benefits of Working with a CLFP

Simply put, CLFPs are the best of the best in the world of equipment financing. They must be able to demonstrate extensive knowledge of the field, and also, they must prove that they have never been involved in any questionable transactions.

The largest benefit of working with a CLFP, however, is simple peace of mind. When you work with a CLFP like those here at Global Financial & Leasing Services, you know that your lender is competent and has your best interest in mind. Just as you would look for any other certified professional, you should also seek a Certified Lease and Finance Professional to finance your business equipment.

Ready to learn more, let’s talk about the possibilities. Or, get started today by filling out an online application.

The Difference Between the Essentials and Nice-to-Haves

Every type of business has its essential equipment that allows it to operate and meet client demand. A hospital, for instance, wouldn’t be able to diagnose patients without machines like X-rays, CT scanners, and MRIs. However, is new waiting room furniture essential? Probably not.

When buying new equipment, how do you justify what is essential and what’s a “vanity” purchase?

What is Essential Business Equipment?

“Essential business equipment” refers to the tools of your trade that your business cannot operate without. Restaurants need ovens and walk-in refrigerators. Loggers need chainsaws and excavators. Warehouses need forklifts and pallet jacks. These are the bare-bones essentials that ensure that your employees can do their jobs.

LEARN MORE: HOW TO ATTRACT QUALIFIED OPERATORS TO MAKE THE MOST OF YOUR FINANCED EQUIPMENT

What you consider necessary will depend on the size and scope of your business. Major companies will often need more equipment than small businesses, and various types of businesses rely on different machines to get work done. An easy way to consider whether your company needs a certain piece of equipment is by asking, “Would we be able to manage without it if it broke?” If your answer is no, then the piece of equipment in question is essential.

Essentials vs. Nice-to-Haves

Once you understand what kinds of equipment are necessary for company operations, you can distinguish between what’s essential and what isn’t. For example, suppose your company owns a small warehouse, and the items that you produce are easy to pick by hand. In this case, a forklift might be nice to have, but chances are, you can get by with a couple of pallet jacks.

Another nice-to-have pitfall that many business owners experience is unnecessarily buying top-of-the-line equipment. All of the bells and whistles on a brand-new machine may seem tempting, but oftentimes, your business can get by with a high-quality, used version with fewer special features. So, when buying equipment, you should consult with your employees to determine what features they actually use, what they would like to have, and what they never touch.

You should also keep in mind that what’s essential to your business will change over time. In the warehouse example, suppose that your company has grown enough to justify a larger warehouse. The forklift that was initially non-essential may become critical in this expanded space.

Using Equipment Financing Wisely

Financing your large equipment purchases can be one of the best ways to get your business what it needs without running your savings account dry. However, having the option to finance can make non-essential purchases seem more appealing. A $12,000 price tag may make you think twice, whereas twelve payments of $1,000 may seem easier to justify. 

When you choose to finance your purchases, you should think about whether that piece of equipment will be worth the monthly bill. Essential equipment will pay for itself, but with vanity purchases, each invoice will make you think twice. If you’re considering buying new equipment for your company, contact the experts at Global Financing & Leasing Services to get the best financing for your essentials.

Communication is Key

2020 has been a tough year. The pandemic and ensuing recession have taken their toll on small businesses, leaving many business owners either dealing with the worst or preparing to do so. Even after making cost-saving moves, you might be wondering, “What happens if I can’t pay my bills or make my payment on my equipment?”

When you can’t make a payment on an equipment lease, your credit and business are at risk. However, in many cases, you can find a way to make ends meet without bottoming out your bank account. If you find yourself in this situation, here are a few tips to minimize damage to your credit and possibly avoid losing equipment essential to your business.

Don’t: Make Rash Decisions

If you’re struggling to make payments, you might feel tempted to throw in the towel, have a “going out of business” sale, and declare bankruptcy. However, before you give up hope, simply step back and take a deep breath. Many businesses recover from hard times, and giving up too quickly can hurt you in the long run.

Do: Seek Alternative Sources of Income

One of the best actions that you can take if your business is in trouble is to find new ways to generate income. This might involve tried-and-true methods like selling assets or it may involve a bit of creativity on your part.

The alternative sources of income that you seek should depend on the type of business that you run. Crowdfunding, for instance, can be effective for businesses with strong local followings, or companies with strong credit can apply for short-term financing. If your business is struggling due to changing regulations or consumer preferences, you could also take your current business model in a new direction to create new revenue streams.

Don’t: Dodge Bill Collectors

Another major mistake that struggling business owners make in a cash crunch is dodging calls from bill collectors. When you have to make tough decisions about your company, you may be tempted to avoid bill collectors until you have money to pay them. However, that’s actually one of the worst mistakes that you can make.

Lenders generally react poorly when a client goes silent, and they often assume the worst. You may be hit with late fees, or your creditor may end up selling your debt to a collection agency. However, if you communicate with them, you can usually find a solution to help you pay off your debt while you get back on your feet.

Do: Plan Your Next Move

When your company is underperforming, you need to take a step back, look at the big picture, and come up with a plan. This may entail restructuring your business, selling off bad assets, or reevaluating your marketing strategy.

You can also bring in professional consultants to help you reorganize your business or come up with new revenue streams. These advisors can offer a fresh perspective on the state of your company, and hiring them will show your creditors that you are serious about getting your financial house in order.

LEARN MORE: 3 NON-NEGOTIABLES WHEN SELECTING YOUR EQUIPMENT LEASE FINANCING PARTNER

Don’t: Blindly Cut Costs

Cutting costs is an important part of getting your finances under control, but you must carefully do so. Many business owners who are in a pinch become so focused on their bottom lines that they forget about the big picture.

When reducing your expenses, you always need to examine how your actions will impact your business as a whole. Layoffs, for instance, might seem like an effective way to cut costs in the short term, but if done improperly, they can hurt employee and customer satisfaction. So, as you make these tough decisions, you need to think about their impact on your company in the long term.

Do: Work with Your Creditors

If you can’t make your monthly payment, then one of the best actions you can take is simply calling your creditors. More often than not, they will work with you to come up with a plan to pay off your debt. This could entail deferring payments or renegotiating your payment plan. 

Your lenders are human, too, and many of them understand what it’s like to go through hard times. At GLFS, we frequently work with businesses to help them get back on their feet without hurting their credit. If you’re one of our clients and are struggling to make payments, contact us.

Equipment Financing is Key to Preserve Cash

2020 has been a tumultuous year for business. Between a global pandemic and the recession that followed, business owners have needed to adapt to constantly changing circumstances, often digging deep into their pockets to stay afloat.

One of the prevailing lessons that many owners have learned is the importance of cash reserves. At its most basic, a cash reserve consists of liquid funds that are easy to access for covering expenses when times get tough. A healthy cash reserve should typically be able to cover three to six months of business expenses. Think of it like a personal rainy day fund; you want to be sure that you can keep up with your bills for a few months if you lose your income.

Whether revenue takes a hit, customers are slow or no payers, an emergency arises, or any other situation businesses face, having a strong cash reserve can help yours survive. Here are a few good reasons why you should strengthen your cash reserves.

Staying Prepared for the Unexpected

If 2020 has taught us anything, it’s to be prepared for the unexpected. Whether it’s a natural disaster, economic downturn or regulatory changes, unforeseen events can send your business into a tailspin if you don’t have a financial safety net.

A strong cash reserve can ensure that your company is well-insulated from the fallout of these kinds of abrupt changes. For instance, suppose that a natural disaster damaged some of your essential equipment. If you have a healthy cash reserve, then you can use that to replace or rent it while you wait on insurance payouts, allowing you to continue doing business as usual. Your cash reserve can therefore serve as an insurance policy against adverse events.

Reducing Your Reliance on Credit

Having a healthy cash reserve can also reduce your reliance on credit. When something disrupts your business and you end up strapped for cash, using credit cards, taking out loans or dipping into your personal funds may seem like your only options. However, with a strong cash reserve, you can use your business savings to cover unexpected expenses or supplement lost revenue.

While using credit is always a part of doing business, you should take care to do so wisely. Credit cards can be useful for discretionary purchases, but you should not rely on them to cover major expenses. Likewise, loans or financing can help fund large purchases while keeping cash on-hand, but you should do your best to plan for these in advance. A solid cash reserve can help you use credit carefully.

Enhancing Your Business’s Finances

Many actions that you can take to enhance your cash reserves are common-sense practices that can improve your company’s overall financial health. Saving profits, paying down debts and investing internally are all excellent ways to boost cash reserves and your business’s financial status.

LEARN MORE: Your Approach to Financing an Equipment Lease Matters

Another excellent way to maintain enough liquidity for a healthy cash reserve is to finance major purchases. Large expenses like new equipment will quickly drain your company’s bank account, so financing them can benefit your long-term financial health. Ideally, the revenue generated by leasing essential business equipment will be greater than the monthly payment. If you’re ready to finance equipment and your preserve cash reserves, contact us or begin your application.