It’s the busy season. Prospects are multiplying, projects are piling up, and even the weather is cooperating. Some days, it seems, you don’t have time to think.
So who has time to consider refinancing their fleet or update aging equipment? A better question might be, who shouldn’t make the time?
Ponder these points:
- When are you most likely to get a favorable look from a lender? Is it in the winter, when business is slow and there’s little income to balance out expenses? Or is it in your busy time, when cash flow, along with your accounts, are at their healthiest?
- Lenders want assurance that you’re able to repay their loans. They give the most favorable interest rates to a company with excellent cash flow. And they don’t penalize you for wanting to make your business stronger; they encourage you to do so.
- Interest rates are still at historic lows, even though they are currently on the rise. The Federal Reserve has indicated at least one more rate increase before the end of 2018. Refinance now and lock in affordable rates. Your payments likely will be lower than they are now and you can use the cash savings to create more profit for your company and establish a cushion for the slower periods. If you can lock in a lower rate, that proactive move will reward you in the long run.
- If you have multiple loans, using refinancing to consolidate can take away many headaches in bookkeeping. Making one payment instead of four or five will leave you more time to concentrate on creating new profit streams. It also will make you less likely to let a payment slip past, costing you late fees.
- It’s becoming easier to qualify for refinancing as financial institutions battle for market share.
According to a report in the Wall Street Journal, “lenders are giving corporate borrowers lower rates and looser terms, even if they operate in industries that are under strain.” The development, WSJ concluded, is a boon to companies looking to borrow cheaply while the economy is doing well.
How long the favorable outlook prevails remains to be seen as the newspaper reported that regulators are wary of too permissive lending.
So is it time for you to make time to refinance?
It could be if …
- You have equity in your fleet and can put the cash to use to increase profitability.
- You need more equipment to continue getting your jobs done in a timely manner. You already have equipment to serve as collateral, if needed, and, as you know, well-equipped employees are happier employees.
- You need to make sure you have the vehicles in your fleet to cover jobs rather than farm out the work for less profit.
- You need to continue to improve your business’ credit score, both by proving your ability to repay the loan and to establish a relationship with a lender.
- You need to add employees or make certain you don’t lose your best ones to better offers. It’s an adage but it’s often true: You have to spend money to make money.
The bottom Line: The best time to shop for new tires isn’t when you’re sitting with a couple of flats on the side of a lonely road. It’s when you can better dictate the terms and make sure that, when the time comes, your trip – and your business — runs as smoothly as possible.
For decades we have helped transportation companies of all sizes take advantage of financial opportunities with an uncomplicated approach to financing. Contact us today for a consultation.