Aesop tells the story of an ant and a grasshopper and how the ant worked diligently through the summer to store up food for the winter, and how the grasshopper showed up at winter asking for food, because he had spent his summer goofing off. In essence, the ant prepared for the future while the grasshopper simply lived life day-to-day and not preparing for the days of need.
Businesses Can Be Ants or Grasshoppers
Every business faces lull periods. These could simply be seasonal slow-downs due to weather or business cycles, or unforeseen circumstances such as the loss of a contract, or personnel or legal issues. And the way you prepare for, and manage through, these situations is largely a function of how much was “stored up” in the good times.
In the instance of a seasonal business lull, you’ll still have bills to pay and obligations to meet – rent, debt service, payroll, insurance, taxes, etc. But because of lower workloads or slower activity, you’ll be generating less income. If you don’t have the cash on-hand to manage through these dips in cash flow, you could find yourself like the grasshopper, needing help. To be adequately prepared, like the ant, you should be saving for the winter. This can come in the form of cash savings, and/or building equity in your assets, including your equipment.
Equipment Equity as Winter Stockpile
If you have equity in your equipment, this could serve as your winter stockpile. Equipment, that is either paid for or financed but with built-up equity, can be refinanced to take cash out to help you through seasonal or unforeseen business fluctuations. But finding a lender that understands the equipment you own and the business cycles you face, can be challenging.
Not all Lenders are Alike
Lenders to help you purchase equipment are plentiful. But when it comes to refinancing, consolidating loans, or getting working capital, many of them head for the hills. These types of loans require a financial partner who knows your equipment, can assess its value, and loan you the money you need to withstand your seasonal business fluctuations.
Commercial Credit Group Inc. (CCG) can be that partner. We’ve worked with ants and grasshoppers, alike, and can help you weather your seasonal ebbs and flows as well as larger, more disruptive business challenges.