How many customers have you had over the years that are trying to get that 1984 dozer running again instead of buying the newer equipment? While clearly there are some operators that take pride in running until the tracks fall off—or longer—many of these people simply feel they don’t have the choice. They are not exactly their banker’s cup of tea and feel they are not in a position to borrow money for the newer equipment.
But this is a problem for you. Maybe they rent when the ’84 breaks down—again—but you often will find these customers are among the slowest paying. Or maybe the equipment sits in your shop seemingly forever until they have the money to pay you. Most small operators simply do not budget for these breakdowns and the cash flow hit is a huge weight around their neck. These situations are really not good for anyone. The customer is holding business operations together with duct tape and your chasing payments instead of running a revenue powerhouse.
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 “fix it again” cycle. By reducing exposure to the break/fix payment crisis and the expensive rental need that follows, you allow 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 is holding their ’84 dozer hostage (which you don’t want anyway) until they can pay.
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 service and maintenance operations and open up a new sales opportunity. Let’s talk.