Breaking Down the Numbers [How Equipment Financing Works To Keep Your Business Liquid]

By Carl Nadig| Jun 1, 2021| 273 Views
3 MIN
Breaking Down the Numbers [How Equipment Financing Works To Keep Your Business Liquid]

Cash is king! In this competitive economy, more cash in your business means you can keep your business afloat. After all, the #1 reason why businesses fail is that they don’t have enough cash in the bank.

But saving money takes time… and when you need equipment now, spending your hard-earned cash can put your business at risk. Fortunately, financial services like equipment financing allow you to keep your cash and at the same time get the equipment you need to grow.

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How does equipment financing work to help your business maintain liquidity?

A benefit of equipment financing is it allows your business to conserve cash. With enough cash on hand, your business has enough liquidity for daily operation costs, emergencies, and even opportunities.

  • You don’t have to spend your hard-earned savings on one large purchase.
  • Get your equipment sooner for a low monthly payment.
  • Conserve your cash for when you need it the most.

When you need equipment now to grow, financial services like equipment financing allow you to keep your cash and at the same time get what you need.

Get Equipment Now, Pay Over Time While Earning Income

No matter the size of your company, keeping cash in the bank provides flexibility to make smart financial decisions for the future.

What’s your business’s liquidity ratio?

A good measure of your business’s financial health is calculating your company’s liquidity ratio. A high or positive ratio is an indicator of your company’s strong liquidity, while a negative or low score suggests a company’s lack of cash for uncertain times.

To determine your liquidity ratio, simply divide your business’s current assets by your current liabilities.

No matter the size of your company, keeping cash in the bank provides flexibility to make smart financial decisions for the future.

When you pay for your equipment over time with financing, you don’t have to worry about an empty space in your balance sheet. And with the right flexible financing program specifically for your business, you can keep cash on hand for additional financial flexibility. That way, your company remains agile – allowing you to invest or spend your savings for necessities.

Some ways to spend your cash include:

  • Payroll
  • Business expenses
  • Incidentals

Acquire Equipment When You Need It

The fact is small businesses can’t expect to grow quickly without the help of outside financing. Waiting to save on purchasing your next piece of equipment can cost your business opportunities.

That’s not sustainable for the long term.

As your business grows and begins to obtain a larger following of customers, you will need access to additional capital to keep up with growth. Equipment financing can support your positive results and avoid budget restrictions.

With enough liquidity in your bank, your company can avoid budget restrictions. You don’t have to wait and save for equipment.

Conserve Your Business’s Bank Lines

Enhancing the liquidity of your business is not only a smart way to keep cash on hand for uncertain times, it also helps build your business credit for the future.

Maintaining liquidity can help your business:

  • Save bank borrowing options for emergencies
  • Pay your bills early or on time
  • Pay off debt

All of those goals can be achieved with the right tools and using them properly. Your financing consultant can discuss how equipment financing can help your business where it needs to go.

By having enough cash in the bank, you’re putting your business in a stronger financial position and giving yourself the support for ongoing cash flow needs.

Keep Your Business Liquid with the Help of Equipment Financing

Growing your business can be a slow process, but it doesn’t have to be.

If you’re looking to grow your business with needed equipment and maintain a healthier financial condition for your business, equipment financing is definitely worth looking into.

Beacon Funding’s dedicated financing consultants are not only experts on the equipment you’re looking for, they can also work with your business to help it grow. If you’re looking to maintain liquidity for your business, then an equipment financing option from Beacon Funding might work for you.

If you are interested in learning more, contact us today and we can help grow your business with equipment financing tailored specifically for you.

Carl Nadig

Carl Nadig

P: 847-258-9532 |  Ecanadig@beaconfunding.com

As a digital marketer, Carl collaborates with Beacon Funding industry experts to write informative content on the commercial truck and decorated apparel industries.