Part Time CFO Services | Curious On New or Used?
Part Time CFO Services | should entrepreneurs by used or new
Business owners are increasingly unable to afford to pay for or canít get financing for the equipment they need to do their job says part time CFO services. With a sobering statistic that 50% of all entrepreneurs have closed their business within five years, and that 29% of those entrepreneurs will say that they ran out of cash as the determining factor in then closing their business, helping businesses firstly avoid the cash crunch in their business to help them not run out of money, and secondly make good purchasing decisions within their business can help business owners avoid this problem and increase their chances of business success.
Business owners often believe that they will be able to save precious money by purchasing used equipment and used vehicles, but is that really the best decision for them asks a CFO services. Here are all the various things that a business owner should research when they are making the purchase to help them make the best purchase for their business. The first question you should ask themselves is how does the age of the equipment or vehicle affect the length of the loan?
This is a fantastic question says part time CFO services, because used equipment and the is because often have a shorter term on them then new equipment and new vehicles. This means a business owner has to pay it back much sooner than if they bought brand. The reason why this isnít a great option, is because any time a business owner has to pay back the loan quickly, itís putting undue strain on the business, and affecting that businesses cash flow. Purchasing new may be the better option, says a CFO services because even though the price takes is itís more expensive, a lower rate and longer term means a much more attractive option for business owner.
The next question that entrepreneurs should ask themselves when they are considering buying used vehicles and is equipment, is how does increased maintenance as well as still cost affect monthly cash flow. Part time CFO services says that this is a crucial question that business owners should ask themselves when considering their purchase, because many business owners do not take into consideration that used vehicles and used equipment will require increased maintenance. This can be more expensive than the cost of paying for the new equipment. In addition to that, due to a lower fuel economy, used vehicles may also be more expensive to run. By taking those costs into consideration, business owners can decide if it is truly cheaper to operate that used equipment or vehicle or not.
The third most important question that business owners should ask himself is how less reliable vehicles and equipment can increase wage costs or steal your time? Part time CFO services that this may be the most crucial question business owners ask themselves when considering buying used vehicles and used equipment. The reason for this is used equipment probably will break down and fail whereas brand-new equipment should. So in addition to costing the business owner time to fix, costing them money to fix, it also costs the business production time as well as ensuring that the business owner has to pay for their staff to stand around and do nothing while waiting and paying for that repair. Because of these reasons, a business owner may choose to pay for brand-new equipment, and eliminate the possibility of downtime in their business which could be even more costly For their business.
Part time CFO services | should entrepreneurs by use or new
This is owners have a hard time paying for brand-new equipment, or have a hard time obtaining financing for that equipment, and consider purchasing used equipment or vehicles for their business says part time CFO services. Is this the best option for business owners? Often a business owner doesnít know how to get financing, or once they are turned down from conventional financing, donít know where to turn. They consider leasing as an option or buying used as an option. What are the best options for a business owner?
If a business owner has already been turned down for traditional financing, they should look into the Canada small business financing. That will loan business owners up to $350,000 in order to help them by vehicles and equipment. This may be an option even if they have been turned down in the past for conventional financing because the federal government is effectively backing that loan, as the guarantor. So banks are much more ready to loan business owners the money when they had been able to get loans in the past. Part time CFO services says this is often a great choice for business owners instead of trying to buy used equipment.
Business owners might often wonder why this the better option than leasing, says part time CFO services. They may have seen a manufacturing company or a leasing company offer 0% financing and think thatís better than the Canada small business financing loan which is base plus prime equaling about 7% right now in Canada. One thing that business owners need to be cautious of when they are considering leasing, is that leasing companies often donít advertise the true leasing rate.
They disguise the price with application fees or financing charges. The leasing company may advertise 0% financing, which is actually not true. The company may say to buy a cash the lock $5000 off the price, but thatís just the finance of the built-in is a lump-sum at the beginning of the affected. A business owner can ask the leasing company these questions in order to figure out their own rate, how long does the term? What are the payments?
And what would I pay if I paid in cash? By knowing all of their options, and being savvy when it comes to the leasing companies, business owners can the financing they need, and avoid falling into the leasing traps and by the brand-new equipment that they need to operate the business.