Yearly archives "2015"

Keep Your Business Up and Running With Proper Cash Flow

Costs can quickly accumulate and take over if you don’t know how to handle cash flow in a business. Financial experts can help you to control the situation with appropriate steps that will improve the way you handle the exchange of money.

Some of the first things you should look at are your debts. Do you carry a lot of debt, making it difficult to afford your monthly payments? The good news is you can speak to a loan officer about debt consolidation. When you put all of your high monthly payments into one loan, it creates a lower payment that is easier to handle. This frees up cash for you to use as needed in your company.

Something else to consider when looking to improve cash flow is your payment system. An online payment system is both time and cost effective for you and your customers. There are a lot of programs available that allow customers to pay right when they place an order. This cuts down on time trying to collect payments, and will make your customers happy as well. As a company, you will not have to sit on inventory until the checks come in through the mail. Rather, you can jump on the orders right away.

Cash sometimes disappears quickly when it comes time to pay taxes. If you stay up to date and know when they’re due, you can arrange payments and other expenses so you don’t run into any problems. The same is true for bills that come due regularly. It’s not too hard to put together a schedule of payments, which could include bills and taxes, so you never put yourself in a situation where you can’t pay something. Of course, if you find that the due dates are coming near and you are not able to pay them, you may be able to get a loan to help out. Accounts receivable financing, purchase order financing or asset based lending are all options that will help your cash flow improve quickly so you can get those bills paid.

More and more companies are finding ways to improve their cash flow. If you feel you need some help, a financial expert might be someone you can turn to in order to gain direction. From debt consolidation to purchase order financing, there is always something you can do to improve the cash coming in and be smart with the cash headed out. Consult a loan officer today to find out which loan option is right for your business.

The Biggest Advantages Of Equipment Leasing

There is a seemingly endless debate among business owners over whether it is better to own or lease equipment. Proponents of owning equipment state that it gives businesses assets that they can use as collateral for additional funding, and they have access to that equipment whenever they need it. However, equipment leasing has a number of big advantages that many entrepreneurs often overlook.

No debt on balance

While owning equipment can be a good investment for a business, it usually requires a large payment upfront, which means taking out a loan. Equipment leasing, on the other hand, is a monthly expense that does not require the large upfront sum. Loans are marked as debt on the balance sheet and can severely impact a company’s credit rating. Because equipment leasing is considered a regular expense like rent and utilities, the credit rating remains intact, and there is zero debt on the balance sheet – leaving business owners with the ability to seek financing for other aspects of their business.

Upgrading

When purchasing any equipment, the value begins to depreciate the second it is delivered to our business. Having equipment serve as assets is great, but it should be noted that the value of those assets decreases as they are used, and then that equipment needs to be sold and more money needs to be spent in order to get newer or replacement models. Equipment leasing gives business owners the option to upgrade their equipment at the end of the leasing terms. This means that businesses will always have access to the latest equipment, without the worry of having to offload depreciating assets or eating the cost when upgrading.

Tax benefits

When a company purchases equipment, they can claim depreciation every year on their tax return. On the other hand, equipment leasing payments are fully deductible, according to Section 179 of the IRS business tax forms. This allows business owners to recoup money every year, which greatly offsets the cost of equipment leasing.

Credit

Equipment leasing agreements have two major credit benefits. First, because equipment leasing is a low monthly expense, business owners can preserve their lines of credit and use those funds for other projects and expenses. Contrast this with purchasing equipment, where business owners use existing lines of credit to finance the initial purchase. Second, equipment leasing gives business owners the opportunity to improve their credit rating. By paying the equipment leasing invoices on or ahead of time, a company’s standing with credit agencies improves, which opens the door for business owners to apply for lines of credit with higher spending limits. Paying equipment leasing bills in a timely manner also counts toward being able to access larger loan amounts when lenders look at financial histories and credit reports.

While there is no definitive answer as to whether equipment leasing is better than purchasing equipment, the former certainly has a number of financial benefits that business owners can take advantage of immediately.