Part-time CFO Services | Should Businesses Buy New Assets
50% of businesses in Canada close the doors to their business within five years, and 29% of those, will say that running out of money was the reason their business closed says part-time CFO services. That is a really staggering statistic, showing that cash flow problems are a huge problem in a businesses face. Business owners often have to make the decision when it is time to replace their equipment and vehicles, what is the best option for them. They may often feel guilty by brand-new, and think that buying used is a better option because it is cheaper. But in order for figure out if it truly is cheaper, there are several factors that business owners should take into consideration.
Business owners should consider financing when it comes to making their asset purchases, is it even possible to finance used equipment vehicles asks part-time CFO services. While it is often possible for business owners to obtain financing for used assets, it may be easier if financing for brand-new. If they are able to qualify for financing on his movement, they should ask their lending agency if the terms they have would be the same as if the equipment was brand-new. Often times banks require the term of the loan to be much shorter on used equipment because the useful economic life of the vehicle our equipment is shorter. Because of that, the term of the loan is shorter and the monthly payments are higher in order for the business owner to be able to pay that back sooner. A goal with business owners should be when considering financing options, to have as longer-term as they can, with as low payments as they can get. This will help them maximize their cash flow in their business by eliminating a cash crunch by trying to pay more money back sooner says part-time CFO service.
Business owners should also take into consideration when purchasing equipment and vehicles, is that brand-new equipment is often under warranty, as well as be more reliable as a general rule. They will probably have to spend far less money or even no money on maintaining brand-new vehicles or equipment says part-time CFO services. They will be able to save money as well as time by purchasing new equipment or vehicles.
Business owners should also realize that brand-new equipment and vehicles will look more professional, and will affect customerís perception of their business Says part-time CFO service. It will increase the customers confidence that they can do a great job.
Part-time CFO services cautions business owners when they are making the decision to buy new vehicles or equipment to not over by when they by brand-new. By only what is absolutely needed functional equipment that is at the beginning of their usage cycle. Often when business owners by brand-new, they by equipment vehicles with all of the bells and whistles, justifying it as something that they are entitled to. Purchasing equipment modestly, and only what is needed can help business owners continued to keep their costs down.
Business owners have a hard enough time operating a business, when it comes time to replace equipment or vehicles, business owners must make some difficult decisions as to what is the best purchase for them says part-time CFO service. Should they by brand-new assets, or should they by used vehicles and equipment for their business. There are several factors they need to take into consideration when they are making this decision.
Businesses need to consider financing options when they are ready to purchase vehicles and equipment for their business. Because obtaining financing for hard assets is much easier, business owners should always try to obtain financing recommends part-time CFO services. If they are unable to obtain additional financing, there is always the Canada small business financing loan that they can apply for. This loan gives business owners up to a maximum of $350,000 in order by equipment and vehicles. The thing that business owners need to keep in mind when they are financing assets, is the term of their loan. Used equipment or vehicles they have a shorter term to pay back, so even if itís cheaper to buy, it may not be advantageous to business owners because trying to pay back the loan quickly is more difficult.
Something else business owners should take into consideration when they are purchasing assets with their business, is how much will it cost to main team those assets. If they are brand-new, they are more likely under warranty therefore the maintenance cost may be built in to the warranty, and less likely to break down and even if they break down, the warranty should cover the cost to fix. On the other hand, used vehicles and equipment probably have no warranty, will have a cost to maintain them, and require more regular maintenance which will also cost. Another factor business owners should take into consideration is that vehicles are more likely to be less fuel-efficient than brand-new ones, and that is going to also increase the cost of running them.
Part-time CFO services says even though most of the time new equipment is the much better option for business owners is not always the case. If this is a piece of equipment that is not used on a daily basis, and by that used equipment is much deeper than even renting that equipment when itís needed, there are circumstances where they used equipment is more economical than brand-new. Business owners need to factor in how often they use it, and what it would cost them to have to buy brand-new or rent it every time they need it.
All these things should be factored in to the decision business owners make when they are deciding if they should buy brand-new equipment or vehicles or if he used equipment and vehicles is a better option for them.