by ARTIS COMMERCIAL CAPITAL | Sep 27, 2022 | Blog
There’s a common misconception among business owners that loans are good and leases are bad. In reality, there are many factors you need to consider before deciding which option is right for your business when it comes to equipment. Both loans and leases are financial tools with different pros and cons. You may be surprised to know that in many situations, equipment leasing can be the better choice for your business.
Factors To Consider When Deciding Between Equipment Leasing and Equipment Loans
One factor that can affect your decision is the amount of available working capital you have every month. Another factor is your credit score. You also need to consider how long the equipment you need will stay current. Will you need to upgrade it in a few years?
Finally, think about the value of owning that particular piece of equipment. Is it something that is going to last for 20 years or more, providing decades of high-quality service?
Down Payments
One of the biggest differences between equipment loans and leases is the size of the down payment you need. Many equipment leasing options provide 0% money down or a small down payment. You can get the equipment you need with minimal hassle and money investment.
With loans, you often need to plan for a down payment of 10–20% or more to get the best interest rates. For a piece of equipment worth $150,000, that would mean having between $15,000–$30,000 ready to go.
Upgrades
Equipment leasing is often the financing method of choice for technology. If your business wants to buy equipment that is constantly changing, you have to consider when it will be worth it to own the item after 5–10 years.
With a lease, you can upgrade at the end of every lease term, or every 2–3 years. When looking for high-tech software, computer equipment, and other state-of-the-art equipment, leasing is often the way to go.
Working Capital
Few things are as important to small businesses as working capital. It’s literally money in the bank for a rainy day. Your working capital helps you keep your business running smoothly, purchasing inventory and handling payroll.
If you have cash flow issues, equipment leasing is better because the monthly payments are generally much lower. That helps you put your capital where you need it without problems.
Whatever type of financing you choose, it’s obvious that your business needs equipment. Using all of your company’s savings to purchase equipment isn’t a wise idea because it leaves you without funds for emergency needs.
by ARTIS COMMERCIAL CAPITAL | Sep 20, 2022 | Blog
Every startup comes from humble beginnings, even corporate entities that are now globally recognized. New ventures must focus on business growth to rise to the next level. By engaging in methods proven to put young ventures on solid footing, expansion and heftier profits become more likely.
Be Humble
Humility is a quality that every business leader needs. Hubris can only get you into trouble. The moment you start assuming you know everything, your growth potential turns limited. Treat your job performance like you would any other employee’s. Allow staff to weigh in on your performance, assuring them you’re open to frank assessments. Another methodology is using anonymous comment cards. What matters is that you open avenues of communication. Also, don’t be afraid to seek advice from colleagues or occasionally reference an introductory business manual. There’s no shame in brushing up on basics.
Stay Consistent
Customers want uniformity with the products and services they purchase. Any change may worry them that the positive experience they’ve previously enjoyed will never repeat. Provide reassurance they can trust your company to deliver exactly what they desire, time after time. When training sales representatives, stress the importance of performing each task the same and craft standard operating procedures that facilitate this goal. Precede product rollouts with informational campaigns to increase customer comfort levels.
Promote Online
Advertising campaigns are always important. Without promotional efforts, you can hardly expect new customers to find you. Traditional outlets, such as radio and television, are generally too expensive for green operations. Thankfully, there’s the internet. Make use of social media and design posts that spread the word far and wide about what you offer. Not only is it affordable, but it’s easy, too. Should you feel uncomfortable with the technological aspect of online promotion, draft a tech-savvy person to helm the project or assist you with tips and tricks.
Get Frugal
How much profit you make comes down to subtracting what you spend from the dollars you take in. Reducing spending always increases your bottom line. Examine your operations with a critical eye for needless expenditures. For instance, replacing supplies with less expensive brands can save thousands over extended periods. Pay attention to every line item, even those that are seemingly insignificant.
The business growth your company experiences depends on how much energy you invest into making it happen. Pay attention to these vital business concerns when building your brand.
by ARTIS COMMERCIAL CAPITAL | Sep 13, 2022 | Blog
A business owner will likely be very protective of what he or she has created. For this reason, he or she will want to have all the control over his or her business’s processes. The unfortunate fact of the matter is that no matter how hard he or she works, he or she cannot manage every single task that is required to keep a company’s plan in motion. This becomes especially the case when the business begins to grow and expand. At some certain points, all business owners must relinquish some control to the employees that he or she hires. Here are some reasons why.
1. He or She Needs To Focus on Running the Business
The job of a business owner should be to make sure that the business is running the way that it needs to run. He or she cannot focus on that task effectively if he or she is doing a multitude of other tasks. If a great business plan is not created and then adjusted with the market or with the progress of the business, then problems can start to occur. With enough of these, the whole business will end up failing. It may seem difficult to trust that employees will be able to handle smaller tasks on their own, but this is necessary.
2. Some Workers Can Do Tasks Better Than Her or Him
A business owner can have more trust in his or her employees when he or she realizes that employees have skill sets that he or she might not have. He or she is usually not able to have the levels of experience that his or her employees have in certain skill areas. Good accountants, for example, have gone through years of schooling and working in the area of accounting.
An owner can have these years of experience, but he or she probably won’t also have years of experience in something such as coding. Once he or she accepts this, he or she can recognize that allowing other people to assist in their dream business will only make the business stronger in the end.
Hiring employees is an eventual necessity for any business. All that owners can do is make sure that he or she is hiring people who have an ample amount of necessary skills and experience. In the end, when he or she sees the profits increase, he or she will be glad that this task was done.
by ARTIS COMMERCIAL CAPITAL | Sep 6, 2022 | Blog
If you are walking through a busy section of town, surrounded by shoppers, you may begin to wonder about the value of owning retail real estate. After all, in a high-performing neighborhood, it may seem like retail property would be an extremely reliable investment, one with steady cash flow that could easily pay for itself in time.
In practice, retail real estate can indeed sometimes be all it’s advertised to be. However, it takes careful consideration and sound investment decisions before determining whether this is definitively the case.
Read on to learn a little more about the investment value of the retail property.
Location Is Everything
Retail real estate is almost always dependent on in-person foot traffic for good business. Consequently, where a given retail space is located is of prime importance in understanding the property’s value as an investment.
How has business been in the given neighborhood traditionally? Is the neighborhood improving, or on the decline? Are there any factors — new construction, changes to permitting or zoning laws, or anything else — that might affect the future value of a retail location? Questions like these are extremely essential to understanding the value of a given site.
Reliable Cash Flow
Commercial property can often be an attractive investment because commercial leases tend to be longer and more stable than residential leases. That said, you will want to ensure that any property in which you consider investing has reliable tenants. Have the current businesses been present in that location for a long time? Financially, are they performing well? It is vital to understand how reliable cash flow will be at a given retail location.
Property Condition
Finally, it is essential to know about the condition of the property in which you are investing. A property that has been well-maintained for years can make a lovely ownership opportunity, requiring only limited upkeep.
However, sometimes retail sites have been neglected over the years, for one reason or another. Purchasing a retail real estate site and learning about plumbing, electrical, or other issues can be a major hassle. You will be on the hook for making necessary repairs, and keeping tenants happy. Thoroughly investigating any problems before purchasing is vital.
Ultimately, the retail property can make a great investment — but circumstances are important. Be sure to do all necessary legwork prior to a purchase to ensure that a given retail location is worth your time and investment.
by ARTIS COMMERCIAL CAPITAL | Aug 23, 2022 | Blog
How can you ensure you have the working capital at hand for your business to stay running full steam ahead? A business line of credit has worked for many companies, and this option may be right for you.
How Business Line of Credit Works
The closest analog to a line of credit is a credit card. Like the limit you have on your credit card to make purchases, a business line of credit has an express amount of funds you can draw from as needed. Similar to a credit card, your line of credit may be revolving credit, which means that what you repay becomes available again for borrowing.
The Cost of a Line of Credit
A business line of credit has different fees that depend on your particular agreement. Expect these four types of fees for a line of credit.
- Origination fees: The fee the lender charges when you enter the agreement.
- Draw fees: Similar to an origination fee, this charge is a percentage deducted before disbursal from your withdrawal amount.
- Bank wire fees: A possible charge for a money transfer.
- Maintenance fees: A charge by the lender for keeping the account open if you do not use it, something like an annual fee for a credit card or maintenance fees for other types of bank accounts.
Business Line of Credit Versus a Business Loan
When deciding which credit route to take, both business loans and business lines of credit have distinct advantages. A loan is typically approved for a specific purpose. A loan can be cheaper than a line of credit, but that is not a hard and fast rule.
A line of credit can be used as you need it, and this flexibility is a huge plus. Consider a line of credit as better for routine costs or emergencies that you can pay back rapidly. Credit lines are great to float you through slow periods. An available line of credit eliminates all the work of getting approved for a loan every time you need extra funds.
It is generally advantageous to keep a line of credit and open other business loans as needed. Responsible use of a credit line improves your credit score and makes it easier to get a bigger loan at the appropriate moment.
Business lines of credit can be a strategic addition to your credit portfolio. A credit line helps you have needed working capital at a reasonable rate while helping you improve your credit score when used responsibly.
by ARTIS COMMERCIAL CAPITAL | Aug 16, 2022 | Blog
If you want to start a business and are not independently wealthy, odds are you will need a business loan. In the simplest sense, a business loan is a sum lent that can help you establish a new business, which will be repaid as the business grows.
But for a number of reasons, business loans can sometimes be tough to access. You may have a limited or non-existent business history, making lenders reluctant to offer you money. On the other hand, your business idea may be unusual or risky, leading lenders to pursue safer investments.
Still, with hard work and attention to detail, there are many ways to access business loans. Below are several important things to keep in mind as you work to secure financing.
A Great Business Plan Is Key
One of the most important steps in accessing a business loan is creating a sterling business plan. A business plan is essentially a document that lays out, in sufficient detail, how you intend to operate your business and why it will have success. It will serve as a blueprint for prospective lenders, demonstrating that you have a workable plan and can repay any loan.
In your business plan, be sure not to go light on details! You will want to have thorough financial projections and analyses, including market research, to show you are prepared for what you are getting into.
Shop Around
There is more than one way to fund a business and more than one means of accessing a business loan. Be sure to do your research and find your best lending options.
Starting with a local bank or credit union is usually a great idea — but there are other options. For some business, crowdfunding can work well. For some individuals, a private loan may be an option. Work to determine what will make sense for you.
Be Realistic
Having a realistic sense of what is possible is important in accessing a loan. Don’t ask a bank for an exorbitant sum if you have no business experience. Seek out what you need, not just what you want. Demonstrate why you need a given amount of money, and work to prove it’s an appropriate amount for your idea.
Ultimately, even with limited experience, there are ways to access business loans. The tips above can help you as you endeavor to find the right loan for your new business.
