The Leasing GroupThe Leasing Group

Tag : business funding ideas

By Bob Callander

Buying, Borrowing and Leasing

Buying, Borrowing and Leasing

Which is best?

#2 – Bank Loans

 

When considering business equipment financing, your bank is often the first and preferred “go to” solution.  You know your banker.  You trust your banker to be truthful and fair.  Your credit history is good.  You and your bank are business partners with a long and mutually beneficial relationship.

The use of bank financing is an obvious way to pay for new equipment without burning your pile of operating cash.  But is it always the right solution for your company’s future?

First consider the following questions:

  1. What is your “global” borrowing capacity?  Does your bank also finance your building, your home, personal vehicles, and your kid’s education?  How will adding one more loan affect your entire borrowing relationship?  Given other obligations, can your bank make a quick decision, or will your cumulative loan balances slow the process, requiring lengthy bank evaluation at multiple decision levels?
  2. What about loan covenants and collateral attachments?  Will your bank require all business assets to be pledged or ask you to maintain specific cash deposits?  How about cash flow coverage ratios and debt ratios?  Will these covenants restrict growth during the loan term?
  3. What about your loan’s interest rate?  It might look reasonable at first glance, but are there fees attached?  Can you payoff early without penalty?  Are there additional charges applied to late payments?  Is the interest rate fixed for the full loan term or is it adjustable or floating, tied to an index such as the Federal Reserve lending rate?

A bank loan can be a good option when financing equipment purchases, but not always the best.  Just make sure you understand the loan process, read the loan documents, and keep options open should your financial condition change during the loan period.

shark tank louisville

By The Leasing Group

Lessons from the Shark Tank

Heads up Shark Tank fans, the sharks have something to teach us.

 

Yes, they are self-promoting.  Yes, the “real” investing is done after the show and off camera.  Yes, the producers select the most outrageous and colorful wanna-be entrepreneurs, not only the most viable.  Yes, conflict theatrics and performance often trumps investing in the best start-up companies.

 

And yes, in the process the show’s creators become wealthy while the sharks become house-hold names.

 

Still, the Shark Tank can teach us something, maybe even something about ourselves.  Because money aside, the sharks gravitate to those with certain traits.  They will invest not in only an idea, but in idea people who clearly exhibit the following:

 

  1. Enthusiasm.  If you pitch your business, you better explode with excitement.  Passion must ooze from every word you speak.  Your body language must scream “invest in me, my product is the next light bulb, the next horseless carriage, the next IPhone.”

 

  1. Communication.  These sharks are smart and quick, so tell your story without stumbling.  Who are your customers?  How do you reach them?  Why will they buy?  If the Sharks can’t visualize a path to sales, they will eat you alive in front of five million viewers.

 

  1. Commitment.  Working hard and long isn’t enough.  The sharks want every drop of your blood and sweat invested in implementing the plan.  Quitting cannot be part of your DNA.

 

These sharks are radical individualists.  Lorie looks through the lens of her Shopping Network, while Kevin prefers licensing opportunities and Mark invests when he sees connection to the world of sport.  Daymond can open doors to retail and Robert to IT.  But, when they see enthusiasm, communication and commitment they circle their prey as one.

 

Why?  Because enthusiasm, communication and commitment are the traits that predict success!  

 

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Buying, Borrowing and Leasing
shark tank louisville
Lessons from the Shark Tank