Even with strong sales revenue, long accounts receivable terms means you are being treated like a bank which offers interest free loans. Consequently, most small to medium businesses understand that well managed cash flow makes the difference between just surviving and really thriving. So, with short-term cash flow being the number one reason cited for accessing financing, and access to finance the most common barrier to innovation according to ABS data, a successful business needs to manage cash flow tightly and leverage it for growth. To help ensure your business falls into the “thriving” category, here are the most common reasons you might be experiencing cash flow difficulties and how asset financing can help.
Before you sign-up to partner with anyone, think about these five thingsIf you are an asset finance provider, chances are you are spending a lot of time thinking about your service offering. Is it enough anymore to simply provide customers with finance – or should I be trying to provide more? With US statistics showing managed solutions are on track to account for 22% or more of the total equipment leasing and finance industry volumes over the next 3 to 5 years, it’s a good question to be asking.
While you can read my overview of important insights from the 2017 Alta Group conference in my earlier post, “Adapt or Business as Usual? Challenges and opportunities in equipment finance”, one of the key themes occupying equipment finance providers globally was the impact of technology.
In February this year I attended the 2017 Alta Group Equipment Leasing & Finance Industry Summit in the United States, a think tank discussing the future of equipment finance.
According to the Australian Government’s Financial System Inquiry, Australia’s two million small and medium sized businesses employ almost 70% of the workforce and are major drivers of economic growth. They account for over half the output of the private sector, and are a significant source of innovation in the economy.
Vendor finance - the definition of a win-win
Sales and growth-focused companies understand that a well-structured, well-priced equipment leasing program lies at the heart of their competitive advantage. That’s why successful companies have been involved in financing discussions with their customers in order to facilitate the sales process almost as long as banks have been lending money for the same purpose.
The Australian Equipment Lessors Association (ALEA) states lease and equipment finance facilitates around 40 per cent of Australia’s equipment expenditure. Yet most vendors, outside the large global companies, are not in a position to open the conversation on equipment finance with their clients as a way of smoothing a common roadblock on the path to purchase, namely budget.
3 easy tips to get started
Social selling is really taking off which is hardly surprising when you think about it. Great sales people have always been great networkers. It’s a gift. They intuitively find, talk to, and build relationships with the right people.
The lifeblood of growth
Commercial equipment & asset financing has been the lifeblood of growth in the economy since the beginning of commerce. Today, with the market flush with investment cash, most corporate borrowers believe they know exactly what to ask for and simply put their request out to tender.
Transitioning from employee to business owner
Things to consider
Whilst there is a multitude of reference material available from small business and government websites (e.g. business.gov.au), the decision to make the change from a Pay As You Go employee career to a business owner can be quite a project. Like all projects, the initial success of the business can be influenced heavily by good planning, good advice, having access to experienced sponsors and limiting the number of unknowns.