Business Lease Financing: Smart Cash Flow Management

We recently blogged about the advantages of business lease financing, sharing just some of the reasons why leasing can be a key element in effective cash flow management. In this post, we’re taking a step back and sharing why managing your cash flow is at the heart of business stability – and even growth.

Cash flow management challenges

Unless you have significant amounts of liquidity – and that can be tough with a newer or growing business – you can run into problems whenever the amount of cash that needs to go out exceeds the amount that’s coming in.

That sounds simple enough, but here is one common scenario. You have a decent number of customers and you’re keeping your employees busy with work. BUT, you need to pay your employees every two weeks and your customers take 30 days – or sometimes more – to pay their invoices. So, even though you didn’t do anything wrong, you’re in a cash crunch.

Benefits of business lease financing

When you lease equipment, rather than buying it, there’s often little to no cash outlay up front – which frees up your cash flow to take care of business, whether that means meeting payroll, taxes or other necessary expenses. You’ll lock in with a fixed lease payment, so you won’t have unexpected drains on your liquidity by a payment unexpectedly going up, and manufacturer’s warranties apply for lease arrangements, covering repairs and even some maintenance costs.

Then, you can use the cash that you saved by leasing to take advantage of early pay discounts on your payables, to increase your sales force to gain customers, or any other way that makes sense to grow your business. Here are more useful cash flow management tips from Inc.com as well as some from the U.S. Small Business Administration Learning Center and the Fox Small Business Center.

Looking for the right business lease financing program?

Here are options that we provide. Note that we offer both loan and lease options and offer credit decisions with 24 hours (we know how time is of the essence!). We accept “application only” deals up to $150,000 and we finance start-ups and owner/operator business applications. Contact us about your equipment lease financing needs — or loan requirements – online or by calling us at 203-354-3654. We’re here to help!