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8 Creative Ways to Attract and Hire Employees During a Labor Shortage

by Business Advice

As the world opens back up again, many small and medium-sized businesses have encountered unexpected difficulty finding employees to fill their open positions. This labor shortage is hitting nearly all businesses, especially those in the hospitality, service/retail, and transportation industries.

As businesses scramble to find workers, many of them are using creative ways to bring in prospective candidates, such as new-hire bonuses and even incentives for interviewing. However, at GLFS, we know that attracting and hiring employees requires more than just offering temporary perks, it’s about connecting with employees and creating an attractive work environment. The following suggestions will help you stay competitive in today’s labor market while expanding your pool of good potential candidates.

  1. Connect with Your CommunityIf you find that you aren’t having much luck on digital hiring platforms like social media, LinkedIn and Indeed, then you should look in to ways to directly connect with your community to find potential employees. Local job fairs, state job boards and educational institutions can provide businesses with slews of eager qualified applicants.

    One of the best ways to find new potential hires is by partnering with vocational training programs. Suppose that you own a car service center and need to hire entry-level oil technicians. If you partner with a community college’s mechanic certification program, then you can hire its students as entry-level technicians to give them on-the-job training. In some specific technical fields, employers are offering to pay for or reimburse vocational training.

  1. Make a Competitive OfferAlthough your business may not have the deep pockets of larger corporations, you still need to compete with them for the best and most qualified candidates. Therefore, you need to ensure that your compensation meets or exceeds the average for the position that you need to fill.

    Sift through job listings for similar positions and determine the range of pay. Then, adjust your pay to meet or exceed the average for these positions. In this competitive labor market, you need to be willing to pay for quality candidates to join your team. If you cannot offer competitive salaries, then add attractive benefits to fill that pay gap.

    READ MORE: How to Attract Qualified Operators to Make the Most of Your Financed Equipment

  1. Expand BenefitsEven if your pay is competitive, some employees may choose another company over yours because it offers better benefits. Expanding the benefits that your company offers is thus another effective strategy to recruit highly qualified employees.

    Most employees, however, view core benefits like 401(k)s and health insurance as givens, so you may need to get creative with the types of benefits that you offer. These new benefits should be meaningful and go beyond coffee bars and ping pong tables in the break room. Gym membership reimbursements, pet insurance, student loan assistance and flexible work hours are just a few examples of non-traditional benefits that you can use to attract potential candidates.

    LEARN MORE: SBA Sets Opening Date for Restaurant Revitalization Fund

  1. Improve on the Job TrainingAnother way to expand your hiring pool is to open opportunities to less-experienced candidates by offering on-the-job training. By focusing less on initial qualifications and more on general skills and willingness to learn, you can find talented employees who you can train for specific roles within your company.

    These types of opportunities are most appealing to recent graduates and people looking to make a career change. A worker looking to leave the service industry and join your sales team, for example, may not have a lot of formal experience, but with their customer service background and the right training, they can excel as a salesperson.

  1. Offer Paid InternshipsCreating a paid internship program can offer students and recent graduates experience while providing your company with much-needed help. Hiring an intern for accounting, for instance, will allow that department to delegate simple tasks like data entry, allowing full-time employees to focus on more advanced work.

    To establish an internship program, you can partner with local colleges and universities that allow students to intern for college credit. Many of these organizations will help you make your internships meaningful learning opportunities while providing you with a steady stream of interns.

  1. Modernize Management StrategiesAltering your management strategies to meet the needs of modern employees is one of the best ways to attract and retain new hires. Most modern employees desire a culture of openness and respect, and many of them enjoy having a degree of influence over their schedule. Online reviews of employers make it easy for an applicant to determine whether your business is one at which they’d like to work.

    Modern managers should therefore be adaptable, understanding and transparent to foster a positive working environment. Coaching instead of telling, explaining rationales for decisions and being understanding of your employees’ personal and professional needs will make your company an attractive place to work.

  1. Outsource TasksCompanies can also combat a labor shortage by outsourcing tasks and projects to freelancers and other organizations. For instance, many businesses hire outside companies to handle tasks like deliveries. These types of activities can be labor-intensive and expensive to manage, so outsourcing them allows you to focus on the core elements of your business while reducing your hiring burden. Finding partners who understand your business and can assist you with various services is a great way to reduce your workload.

    Likewise, you may want to employ freelancers for temporary projects like logo redesigns or website updates. Unless you need someone to manage the project in-house at all times, it is easier and more cost-efficient to temporarily hire a freelancer to complete a short-term project.

  1. Focus on RetentionAlthough your business may be focused on hiring new employees, you should never lose sight of the ones that you already have. Losing current employees can exacerbate issues with short staffing and hurt company morale, which can lead to more attrition.

    Your staffing efforts should also include outreach to current employees to determine what they like and dislike about their working environment. This will illuminate ways that you can improve working conditions to retain as many employees as possible. You should also be sure that any benefits extended to new hires are also available for current employees.

 

What Types of Small Business Loans are Available?

by Business Advice

In March, we wrote about 2021’s top trends in equipment financing. To make the long story short, this year brings much to boost business owners’ confidence now and continuing throughout the year. As the economy shows signs of rebounding, small business owners are ramping back up and/or investing in equipment to meet growing demand. This is especially true in for medical, construction and manufacturing equipment.

Despite growing confidence, the lesson learned over the past year is still fresh in everyone’s mind. You really never know what can happen, so keeping a healthy amount of cash reserves on hand can mean the difference in your business surviving a downturn.

With a desire to invest in equipment and the need to keep sufficient cash reserves, business owners are taking a closer look at the financing options available today. There are several small business loan types, such as:

  • Bank loans
  • SBA (Small Business Association) loans
  • Working capital loans
  • Sale/Leaseback of equipment

Loans are never a one-size-fits-all proposition. Each type of small business loan is different, ranging from those best for start-ups, those with less-than-perfect credit and those who need short-term financing to financing equipment leases.

Bank Loans

Historically low interest rates can make a bank loan sound like an excellent way to fund your business or an equipment purchase. If you qualify for a bank loan, you might score a lower interest rate than you would with any other type of loan. 

This loan type may be perfect for you if:

  • Your business is in an industry in which the bank is comfortable working
  • You have a history of excellent credit
  • You make a hefty down payment
  • You have time to wait as you jump through application hoops and wait for approval
  • You’re comfortable with a bank lien on your other assets

Of course, these conditions aren’t ideal for many business owners. And, sometimes, business owners don’t meet the bank’s requirements. 

SBA Loans for Small Businesses

The Small Business Administration is a federal organization that serves as a resource for small business owners. One of the biggest benefits offered by the SBA is its low-cost, government-backed loan programs.

The SBA works with lenders like banks and nonprofits. A portion of the loans offered by the lenders are backed by the SBA, which translates to lower rates and better (and longer) terms for borrowers. For example, current interest rates for SBA loans in May 2021 being:

  • 5.50% – 9.75% for SBA 7(a) loans
  • Approximately 2.91% – 3.76% for SBA CDC/504 loans
  • 3.75% for for-profit businesses and 2.75% for nonprofit businesses for EIDL loans for COVID relief
  • 0% if forgiven; 1% if not forgiven for PPP loans
  • 4.00% with no credit available elsewhere, or 8.00% with credit available elsewhere for other SBA disaster loans

Similar to bank loans, they require mountains of paperwork, usually involving business plans and multi-year projections. SBA loans are good options for business owners with a strong credit profile who are growing or expanding business, gaining working capital or refinancing debt.

Tempting, right? However, the entire process can last months and the majority of applications are denied due to bad credit, character issues, lacking collateral, insufficient revenue or capital to repay and inability to repay due to other outstanding loan payments.

Working Capital Loans

Investopedia defines a working capital loan as a loan that is taken to finance a company’s everyday operations. These loans are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company’s short-term operational needs.

While they can be a low- or medium- cost loan type, also they can be a very high-cost way to finance a small business. If you have good credit and profitability, loan rates are more reasonable. If you have credit blemishes or business losses, loan rates run much higher.

Sale/Leaseback of Equipment

If you’re familiar with how home equity loans work, then a sale/leaseback of equipment is the equivalent in the business world. This type of loan is an option if you own equipment assets like trucks, machinery or construction equipment.

The equipment is sold or leased, but retained for business use. Because the transaction is secured by the equipment, this loan type is relatively easy to qualify for, and it can be structured so that:

  • You own the equipment at the end of the term
  • All payments are tax-deductible
  • Terms range from 24-60 months

What’s the Best Loan Type for Your Small Business?

Every business is unique, and there are small business loans that are best suit different situations. The advantage of working with Global Financial & Leasing Services (GFLS) is that as a direct funder, we can offer funding opportunities that a typical bank cannot. And, under certain circumstances, we can use our connections to numerous banks and institutions to provide our customers with the best financing solution that is available for their credit profile. In the end, our clients not only get the right financing for their needs, but also access to the funds faster.

READ MORE: GFLS Steps Up When Big Banks Don’t

Unlike big bank applications, our process is simple and streamlined so you have a decision often in 24 hours or less. Talk to one of our equipment lease financing experts at 480.478.7400 or start your application today.

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This the Time to Tackle Continuity Planning for Your Business

by Business AdviceStartups

Here’s What COVID-19 has Taught Us

If this past year has taught us anything, it’s the importance of continuity planning for businesses.

COVID-19 caught everyone off-guard, including most business owners. They weren’t prepared for freight slowdowns, sick employees and limited office capacities. Many scrambled to adjust during the early days of the pandemic, and some experienced their businesses going under.

The pandemic served as a wake-up call for many business owners about the importance of developing a Business Continuity Plan (BCP). A solid BCP can help you navigate your course while enduring pandemics, natural disasters or other serious disruptions.

If you or your company’s leadership team is in the process of developing a BCP in the wake of COVID-19, consider the following key elements to ensure that you are ready for nearly anything.

Maintaining Essential Business Functions

The primary purpose of a BCP is to identify and determine how to maintain the core functions of your business. For instance, if you manufacture goods, then keeping your assembly line running will be your top concern during a crisis, and you may not be as concerned with issues like marketing.

You must take care to determine which departments and functions must be prioritized if your work is disrupted, and you must plan to keep those areas afloat. With COVID, you had to ensure that all essential employees knew their duties and had proper protective equipment while giving non-essential ones the equipment that they needed to work from home. Likewise, if a natural disaster hit, you would need to prioritize maintaining or rebuilding the core parts of your business over less essential ones.

Keeping Your Customers Happy

If disaster strikes, you will also need to be prepared to communicate with your customers about how it has impacted your business. For this, you should collaborate with your sales and/or marketing team to prepare a message that is honest and effective to maintain customer loyalty and satisfaction.

Your communication plan should always prioritize honesty and integrity. If a freak winter storm has disrupted your freight and delayed orders, then you need to tell customers that directly, and you must provide realistic timelines for fulfillment. One way to smooth over any disappointments is to offer discounts or other future benefits to clients who choose to weather the storm with you. 

Your customers make your business, and in any BCP, you must have a plan to keep them satisfied, even when your business is struggling.

Maintaining Your Financial Health

Finally, your BCP should outline how your business plans to address losses from a crisis. Some of these actions may be as simple as expanding your emergency fund, but other issues, like protecting your credit, may be more difficult.

You must create financial contingency plans that maintain the primary functions of your business while cutting costs. This may involve furloughing non-essential employees, selling assets or working with your creditors on payments.

READ MORE: What You Should and Shouldn’t Do If You Can’t Make Your Equipment Lease Payment

At its core, your BCP should consist of preventive and emergency measures to take in case of emergency without hurting your customer base or credit score. Part of building a good financial BCP is working with trusted partners like Global Financial & Leasing Services (GLFS). To learn more about how we assist businesses during trying times, contact us.

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What are the Benefits of Equipment Leasing?

by Benefits of LeasingBusiness Advice

5 Reasons to Consider Leasing or Financing Equipment Now

Our team at Global Financing & Leasing Services (GFLS) is seeing light at the end of the tunnel. Not only are we hearing our customers’ stories of confidence thanks to increased business volume, but also, we’re seeing it in the numbers. Certainly, the pandemic has affected small and mid-sized businesses across a spectrum of industries. It’s these exact organizations that’ve been hit hardest and have more difficulty securing financing, especially if they fall on the lower tier of credit ratings.

The economy is preparing for a post-pandemic upswing. When lenders, like GFLS, step up to provide equipment financing, businesses have a strong chance of rising like phoenixes from the ashes. GFLS was founded during the Great Recession to support businesses who aren’t well served by big banks. We have a history of successful lending, access to capital and commitment to our mantra: “When other lenders say no, we often say yes.”

If you’re debating whether this is the right time to finance or purchase equipment for your company, consider these five benefits of equipment leasing.

  1. Upgrading your equipment is more affordable with financing.

    It’s understandable that business owners want to have the latest and greatest equipment and for good reason. State-of-the-art machines and technology can increase employee satisfaction while cutting labor costs, and they can cut other expenses bill, too, with green technology, improved efficiency, fewer repairs and down time, and increased productivity.

    Remember, keeping up with new developments can quickly become expensive if you buy outright, depleting your working capital. That’s where leasing and financing comes in handy. When you don’t have to pay the full cost of new equipment, you can afford the best new products, while keeping a healthy amount of cash on hand.

    READ MORE: 2021’s Top Trends in Equipment Financing

  1. Financing keeps your working capital at a stable level.

    When you make a large purchase up-front, your bank account will take a major hit. This means less money for other endeavors, and if your business experiences a downturn for whatever reason, then you’ll have less cash in your rainy-day fund.

    Paying for your equipment over time helps you keep more of your liquid funds available for other uses. Whether you need to make multiple purchases or your company hits a snag, having cash on hand offers more flexibility and potentially avert making tough financial calls.

    READ MORE: Why Your Business Should Keep Cash Reserves

  1. You can open up other credit lines.

    Financing a purchase can help you keep your business’s other lines of credit open. Many companies, especially in their early stages, will use all types of credit for necessary expenditures. These credit lines could include business loans, personal loans, or even credit cards. Therefore, business owners need to be careful to use their credit wisely and make purchases that will benefit them in the long term.

    When you use leasing or financing specifically for an equipment purchase, you aren’t cutting into these other lines of credit. You can then use those other lines of credit for other expenses that arise as your business grows since your equipment financing is separate.

  1. You can take advantage of tax benefits.

    When you lease or finance equipment, you can take advantage of a surprising number of tax benefits. While you should always consult an accountant and tax attorney to ensure you will benefit. Generally, you can expect to write off part of your monthly payments if you lease or finance a purchase.

    If you finance, all of your interest payments will be tax-deductible as a business expense. You can write off the full cost of your payments if you lease your equipment, and you can also choose to write off the full cost of the equipment in a given tax year. This can come in handy during tax season when you want to maximize your savings.

  1. Applying for equipment financing is surprisingly easy.

    Another factor that keeps business owners from leasing or financing equipment can be the misconception that applying for credit is tedious. However, while big banks may force you to jump through hoops to get a loan, equipment financing lenders make getting approved far simpler.

    At GLFS, for instance, we aim to keep our application process as quick and painless as possible. We take a look at your business’s overall financial picture, and we respond as soon as possible (often in 24 hours or less) with solutions that meet your company’s needs.

If you’d like to learn more about the benefits of financing your next equipment purchase, contact us.

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Global Leasing & Financial Services Steps Up When Big Banks Don’t

by Business AdviceFinancing

When Other Lenders Say No, We Often Say Yes

In the wake of the pandemic and other market disruptions, business owners are understandably struggling with uncertainty, especially when it comes to financing large equipment purchases.

Financing equipment through big banks can always be rather challenging for businesses. However, in recent times, banks are taking fewer risks, meaning there less money out there to fund financing. Even companies with perfect credit scores struggle through the approval process, and those with blemishes on their credit reports are at an even greater disadvantage.

That’s why smaller lending firms like Global Financial & Leasing Services (GLFS) step up to help small businesses. Since 2009, GLFS has set out to provide small and mid-sized companies with the financing they need to make essential equipment purchases. Unlike big banks, GLFS looks beyond your and your company’s credit score to find a financing solution that works for you.

Why We Started GLFS

GLFS was founded to provide equipment financing alternatives to major banks. Historically, obtaining credit from large financial institutions is tedious and time-consuming. Banks often require large amounts of paperwork to kick off the application process, and decisions can take weeks, if not months. Plus, business owners waste precious time waiting for an approval that may never come.

We started GLFS as a way to make financing more accessible for small and medium-sized businesses with varying credit scores. At GLFS, we look at your business’s full financial picture to make decisions, and small blips or a short credit history doesn’t necessarily mean a rejection. We also aim to provide answers and options quickly, usually in 24 hours or less, eliminating long and frustrating waiting periods.

GLFS is in business to help other businesses by offering flexible solutions for equipment financing across a variety of industries, and we aim to work with you individually to find a finance or lease agreement that meets your unique needs and goals.

The proof is in the numbers. Some of our recent closings include:

  • A medical services company financed a $400,000 MRI imaging system
  • A healthcare company financed a $100,0000 used hyperbaric chamber
  • A logging company financed a $40,000 excavator
  • A general contractor financed a $28,000 Ford F350 truck
  • A construction company financed a $270,000 Vermeer Drill
  • A construction company financed a $30,000 tele handler
  • A construction company financed a $45,000 new Chevy Silverado truck
  • A trucking company financed a $29,000 2012 Freightliner

Is GLFS is a Better Financing Option for Your Business Equipment?

Many small and medium-sized businesses prefer GLFS to traditional banks due to our easy application process, holistic decision-making and personalized approach to lending.

GLFS’s credit application process is designed to be as streamlined as possible, while giving us a holistic picture of your business and needs. We understand that time is always in short supply when running a business, so we designed our application to take up as little of your time as possible.

GLFS gives a more personalized approach to equipment financing. We work with our partners to find lending agreements that will help you reach your goals, and that means providing support during hard times. Contact us to learn more about how we can help your business.

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Choosing a Lender to Finance Equipment? Don’t Underestimate the Importance of Industry Associations

by Business AdviceFinancing

When financing major business equipment purchases, choosing the right lender from the many out there can boggle the mind. Shady companies and scam artists have flourished in the age of the internet, and sometimes, it can seem hard to tell who’s legitimate and who isn’t.

One of the easiest ways to ensure that you select a trustworthy lender is by looking at professional associations like the American Association of Commercial Finance Brokers (AACFB). These groups have high legal and ethical standards for their members, and they can often provide guidance on specific companies for financing equipment in your industry.

If you plan to make a major purchase, then you will want to deal with business-minded lenders who you can trust. Choosing a lender that is a member of a professional association is an excellent way to ensure that your equipment financing is in good hands.

Why Associations Matter

Associations have high standards for their members to ensure that they are reputable lenders. To join these groups, a lender must pass a variety of tests and background checks proving they are legitimate. Members must also often undergo periodic reviews, and they can be expelled from the organization if they are found to engage in unprofessional or unethical conduct.

Additionally, most associations have strict ethical standards that members must follow to maintain their affiliation. AACFB’s code of ethics mandates that its members are honest and professional in their dealings and are fully transparent with clients and relevant organizations.

What Risks Do Non-Affiliated Lenders Pose?

Non-affiliated lenders pose several risks to any company that uses them. Many of these companies engage in predatory practices, such as charging excessively high interest rates or fees. They also may use pressure sales tactics to lure consumers into accepting less-than-ideal loan terms.

LEARN MORE: 3 Non-Negotiables When Selecting Your Equipment Lease Financing Partner

Financing scams unfortunately are prevalent in the age of the internet. Many fraudsters will build legitimate-looking websites to attract consumers, and they will then attempt to steal your information or money. Typically, they target small businesses with limited credit, offering deals that seem too good to be true. Many of these fake lenders will claim to be affiliated with an organization, so you should take time to verify the validity of the organization and their membership before working with them. Associations keep a list of members on their websites for verification purposes.

Choosing the Right Lender for You

While choosing the best lender for your needs depends on many factors, you should always use a company with official affiliations to legitimate organizations. These lenders must meet strict professional and ethical standards to remain in their associations, making them substantially more trustworthy than non-affiliated ones.

You should also take care to select a lender with expertise in the type of equipment that you plan to finance. Associations can also help you in this regard by providing directories of reputable firms in your field.

Global Financial & Leasing Services is a member of the American Association of Commercial Finance Brokers. We specialize in financing for equipment used in health/medical, construction, restaurant, machinery/manufacturing, printing and logging/forestry. We work with business owners who have less-than-perfect credit.

LEARN MORE: What Type of Equipment Qualifies as “Essential Business Equipment?”

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

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Working with a Certified Lease and Finance Professional (CFLP) is a Smart Decision

by Business Advice

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.

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What Type of Equipment Qualifies as “Essential Business Equipment?”

by Business Advice

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.

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What You Should and Shouldn’t Do If You Can’t Make Your Equipment Lease Payment

by Business Advice

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.

Businessman putting coin to saving jar and use calculator. Money

Why Your Business Should Keep Cash Reserves

by Business Advice

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.