Acquiring new capita equipment is one of the keys to growing a business.
However, waiting to make the purchase in cash delays projects and prevents you from investing that cash in projects that will generate a return. In this post, we will talk about how much of a problem this is for a business that wants to expand and what solutions are available for business-friendly financing.
Equipment comes in many different forms:
- It could be something large like a pickup truck or other vehicle or small, like an upgraded server. The biggest way of differentiating equipment is by whether you plan to buy it new or used. Used tends to be less expensive, but of course there will be a lower lifetime, it won’t be customized to your needs, and so on.
- Deciding between new and used equipment is usually a case by case decision because every need your business has will be different, and you need to find a good price for what you will use to solve your company’s problems.
- Whether you use new or used equipment, you will need to decide on how to purchase it, assuming that you are not renting. Renting is an option in some scenarios, but certainly not all, so it is likely that you will face the prospect of needing to buy some kind of equipment even if you start out by primarily renting what you need. In any case, equipment is costly.
- There are two approaches you can take to buying. First, you can try to accumulate the cash you need and pay for what you need all at once up front. Second, you can get a loan and pay for it over time through installments.
When you pay in cash, you have to spent time and effort saving up money. For a business, having a lot of cash on hand is usually not a good thing. All that money could be doing useful work that pays a return, like buying inventory to sell or funding other projects. If you have to spend months just growing your cash pile, that is months’ worth of lost production or growth that has to be put on hold.
When you do get the money, you can start using the equipment and then it will still be some time later that you actually start to make a profit on the transaction. Therefore, the two biggest problems with a cash purchase are the length of time that you have to wait from the time you start saving until the time the equipment purchase finally pays off and the opportunity cost of saving up cash and being unable to use it on anything.
If you get a loan instead, there’s no need to wait to get cash. The loan provider will front the money and you can use the equipment right away. Then you pay back the loan in installments over time. You will need to pay interest, but this allows you to precisely measure how well your equipment worked. If it cost $10,000, and you had to pay 2 percent interest on the loan, then the equipment has to make you more than $200 above and beyond what you paid for it. For example, if you needed to buy a new truck to make deliveries using the previous numbers and the truck made you an extra $500, then you made a profit of $300, or a 3 percent return on your investment. You can use that $300 of profit to pay bills or make further investments.
If loans are a more favorable system, why use anything else? The problem lies with who gives out the loans. Generally, it’s banks. Especially in the uncertain decade after the financial crisis of 2008, banks are reluctant to lend out money if they think there is any risk that you won’t be able to make the payments.
As a result, they have stringent paperwork requirements, high interest rates, and little flexibility. This is an unwelcome state of affairs for businesses who need to lease equipment in Miami, because it makes it harder to get a profitable investment and the process of applying for and getting the loan is harder than it has ever been before, with lower chances of getting approved. The result is that many companies have to make painful decisions between trying to go through a bank to get a loan, which is a long and difficult process, trying to accumulate the cash for the equipment, which is also difficult and ties up useful cash, or just giving up on the project entirely.
CPN Numbers is a Florida business services and finance company.
that specializes in leases and loans, especially for small business. CPN Numbers has a wide array of different services which range from providing working capital to equipment leases and financing for land purchases through many loan products.
In this specific case, CPN Numbers recognizes the unique needs of local Florida businesses and the difficult choices they face. You need access to a simple, fast, and accessible lease for equipment with an interest rate that leaves you room for profit.
That is exactly what CPN Numbers provides. Traditional banks require long hours of paperwork, background checks, extensive information about the project and equipment, and compliance forms of all kinds. On the other hand, CPN Numbers has a smooth and easy process that takes much less time to complete. That means less waiting and less uncertainty. You’ll be able to get to work with your new tools faster, which means no extended lag time where you wait for approval or months of building up cash reserves that you need in other places. The payment structures are tailored to the needs of your business, so you can fit it into your operating budget with ease.
Having ready cash is one of the toughest challenges for a young business. Cash has to pay for operating expenses, payroll, fees and licenses, utilities, inputs, and all kinds of other needs. Leasing equipment means that you can retain enough available cash to afford all of these things while using your new equipment to drive growth.
CPN Numbers has much experience with equipment leases because this is such a common demand for businesses. Here is a partial list of some of the services
CPN Numbers has performed for previous satisfied customers:
- Leasing heavy equipment
- Leasing medical equipment
- Construction equipment leasing
- Computer leasing
- Office equipment leasing
- Software leasing
- Security equipment leasing
- Production equipment leasing
- Truck leasing
- Restaurant equipment leasing
- Fitness equipment leasing
- Medical equipment leasing
- Printing equipment leasing
- Agricultural equipment leasing
- Woodworking equipment leasing
The list is so long and diverse because so many different industries depend on expensive capital machinery to function and thrive. CPN Numbers has been able to work with companies of all sizes and across many different industries to reach favorable terms on their need for equipment leasing finance.
That is not all.
CPN Numbers is a leader in encouraging women and minority-owned businesses to succeed with special grants and programs designed specifically for their needs. If you run a business and you think you might qualify for one of these programs, contact CPN Numbers right away, even if your financial service needs don’t include equipment leases.
CPN Numbers has many different areas of finance and is always willing and able to help local business owners grow to their full potential regardless of their origins or circumstances.
The bottom line is this: Florida businesses have needs that banks simply are not meeting. A specialized business lender that understands those needs and has the solutions with minimal paperwork and delays is the key to removing financing obstacles.
There are a lot of powerful ideas in Florida that go unfulfilled because they never get access to the right financing opportunities. CPN Numbers is an attempt to remedy that.
CPN Numbers understands the importance of speed to act on windows of opportunity and the need to maintain cash flow to cover expenses while projects are underway. Whether the new initiative is a marketing campaign, opening a new location or expanding an old one, starting up a new line of business, connecting to heavy equipment leasing companies, leasing equipment to expand output, or something else entirely, CPN Numbers is there to give the people of Florida what they need.
These can be exciting times to run a business, but also difficult times, and nowhere is that more apparent than in how hard it is to get fast, easy, and affordable financing. If you think your business would benefit from financing for working capital, equipment and machinery, expansion, or anything else, do yourself a favor and skip the traditional banks- start your relationship with CPN Numbers and get going on your projects today.