A solution for slow paying rental customers
Rental equipment is a critical part of your revenue stream. And renting fills an important operational need for operators, but did you know…
31% of construction equipment rental customers do so because they don’t think they can purchase.
That’s nearly one third of all rental customers that would rather own than rent, but cannot because of a gap in their financial position. They’ve had some difficult times, have been turned down for credit and they think they are generally not in a position to borrow money. Rental becomes their only real option to get this revenue producing equipment to work.
But what happens when they struggle to pay you? Remember, many of these companies have had or are going through more difficult times and paying the short term rental rates for long term needs might be a cash flow burden they struggle with. This leaves your team chasing payments rather than growing revenues.
The solution: Asset -Based Equipment Lending
An Asset-Based equipment lender should focus on the assets—not the credit challenges—and be able to offer a solution either immediately for purchase or a solution the customer can work to in the short term that can get them out of the “have to” rental cycle. By reducing payments from rental rates they improve cash flows, allowing them put more money on the bottom line and position themselves to get out of the credit challenges they are facing. You can stop chasing payments and be known as the dealer that helped them when almost no one could as opposed to the dealer that cut them off because of slow pay rental agreements.
But perhaps the most important benefit is the ability to sell equipment that might be sitting in inventory for a while. If you match these customers with lower turning, lower cost inventories, now you have the opportunity to do more than just solve a delinquent payment issue. You can proactively sell equipment you might normally have more trouble selling to those with big credit challenges that would be thrilled to have the equipment. This opens up a new revenue opportunity for your dealership…and a profitable one.
At Dakota, we have offered asset-based equipment finance solutions to construction related companies for years and are offering select equipment dealers the chance to offer our programs. Let us show you how we can improve receivables from rental operations and open up a new sales opportunity. Let’s talk.