For many small-business owners, securing financing is one of the most intimidating parts of owning a business. It’s also one of the most important. For a tree care contractor, financing can be essential to getting the equipment you need to do your job day in and day out.
That is why for years, Vermeer has partnered with DLL, a global financial solutions company, to provide financing solutions to customers.
“DLL has an exclusive partnership with Vermeer and Vermeer dealers to find financial solutions and incentives for their customers to easily procure equipment,” said Jerry Sokolowski, DLL director program management, vice president, program management, Americas. “This partnership currently serves customers primarily in North America, but they also serve other countries around the world.”
Tree Views worked with Sokolowski and the DLL team to provide some general tips and guidelines to help owners navigate through their financing options. We note that individual circumstances and conditions may vary and the information contained in this article may not apply in all situations.
Financing options
While there is a wide variety of traditional and nontraditional funding sources a person could draw from, Sokolowski encourages customers to work with Vermeer dealers to utilize their special financing offers.
“It might be easy to call up your bank for a loan, but ignoring those Vermeer financing deals could cost you in the long run,” Sokolowski said. “You could save thousands of dollars in interest fees.”
What the lender will need
Before lenders make financing decisions on equipment purchases, they want to understand the business’s financial health — the state of its financial situation — and get a clear picture of how the equipment will be used. This could include the background of the company, conditions of the work environment, average hours of use for the equipment throughout the year and any details on equipment trade-ins or down payments. A report summarizing a company’s current financial position, often referred to as a financial statement or shortened to “financials,” is sometimes needed if the equipment price exceeds a certain threshold.
To purchase or to lease?
It is important to know the goals of your business. Are you interested in owning the equipment, or would you like the flexibility to return it at a later date for the ability to upgrade?
“Leasing has increased dramatically over the last six years,” Sokolowski said. “This is due to a number of factors, but generally most folks in the industrial space have just become more educated in the benefits of leasing.”
Sokolowski reminds customers to be prepared with answers about their long-term equipment plans because dealers will want to know in order to recommend the best financing option.
“Vermeer dealers will ask several questions when helping a customer consider whether to lease or own,” Sokolowski said. “How many hours they’re using it — what are those operating conditions? What’s the long-term goal of the equipment? Do you eventually want to own it or when it has so many hours on it would it be best to get something different?”
How can a business owner keep capital costs down?
Capital costs are one-time expenses to be used in the production of goods or rendering of services. Buying equipment is an example of a capital cost. Financing is one of the tools that can assist in keeping capital costs down. Most importantly, financing enables business owners to conserve their cash, allowing them to budget their equipment costs over the term of a loan or lease instead of spending that cash upfront. Depending on the type of financing, owners can often save on income taxes, replace equipment more frequently and preserve their bank lines of credit for other business needs.
Additional quick tips:
- A common mistake is not putting enough equity into a transaction. Trading in a used piece of equipment or making a down payment will help to lower the monthly payment over the life of the lease or loan.
- Develop an adequate business plan.
- Do not start a business with a large loan.
- Keep your expenses under control.
- Carefully consider how many employees you will need.
- Have the appropriate amount of building space for your business.
- Have a plan for collecting bills.
- Have a plan in case you run into cash flow issues.
For more information about Vermeer financing options, contact your local dealer. View more articles on the Tree care, rental and landscape blog.
This content is for informational purposes only and is not intended to be, and does not constitute, financial, legal or any other advice. Circumstances for transactions may be unique based on financial circumstances and laws of applicable jurisdictions. Customers should always consult their attorneys, accountants and/or other financial advisors for advice concerning individual transactions, tax liabilities and obligations. Vermeer Corporation reserves the right to modify or terminate all services and programs offered, without notice.
Vermeer, the Vermeer logo and Equipped to Do More are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries. DLL is a trademark of De Lage Landen International B.V. © 2017 Vermeer Corporation. All Rights Reserved.