The fact that the interest rate is fixed is a significant advantage for equipment financing…
Assessing and managing risk is a crucial part of managing a business, but finance risks are a critical risk that is often overlooked!
When I talk about finance risks, I am not talking about affordability, but proactively managing the risks presented by the finance market in general.
As finance is such an important part of business, it is vital to understand and proactively manage finance risk!
Below I have outlined critical finance risks business owners need to know and what you can do about them:
Finance Risks for Business - No Backup Plan!
Having a back-up plan is an essential part of running a business.
Simply this is about not having all your eggs in one basket. For example, not being totally reliant on one supplier. Having backup production capacity. Protecting against loss of data by backing up to the cloud etc.
It is no different when it comes to managing finance risks!
Prudent risk management means having a backup finance plan! A plan that means if your Lender doesn’t deliver, changes its policies etc. that it isn’t terminal for your business.
Lenders naturally love to have all your business (called share of wallet) and whilst there are some benefits to this, it is not without risk for business owners!
For peace of mind you need a fall-back position which can be achieved by spreading your risk (finance) and developing relationships with other Lenders. This is prudent finance risk management!
Finance Risks for Business - Constant Staff Changes!
Business Finance Risk - Sudden Changes in Lender Policy!
A Great Finance Package - Compared to What?
Business owners are exceptionally busy, and it is easy to just take the simplest option or let things tick along as they are without reviewing them.
This can prove costly to both your bottom line and potentially, growth!
To effectively manage your financial risks, it is important to work with someone who is across current market conditions to ensure your finance package is truly market competitive from both a cost, and terms and conditions, perspective!
You may believe you have a great relationship with your Lender, but unless you have access to the total market, it is a bit like buying only a brand product from one supermarket! You are flying blind as you have no real basis for comparison!
At The 500 Group, a key part of our value proposition is helping clients better manage the very real finance risks that exist for businesses in today’s world.
We work hard to build strong relationships with Lenders across the total market. To understand their policies and appetite for different types of financing.
Our business model is to also be there for our clients in the long-term. To understand our client’s needs, goals and strategies, to provide support and be there for the journey. This is what business is about!
If you would like to learn more about how we can help you better manage financial risks in your business, don’t hesitate to give me a call!