Why Customized Financing Matters in an Uncertain Economy

Why Customized Financing Matters in an Uncertain Economy

*This post is from CMB partner Essex Lease. Visit them for flexible lending solutions.

“Unprecedented” is a word that’s been thrown around a lot in the last couple of years – and nowhere is that clearer than in an economy that hasn’t behaved the way any experts would have predicted.

For business owners navigating unpredictable times, getting control over what can be controlled is really important.

But if you’re still relying on a one-size-fits-all financing plan from a bank, you may inadvertently make things more difficult for yourself. Here’s why a customized plan may be a better choice for your business.

You Can Lower Your Monthly Payments

The reality of surviving “unprecedented” economic times is that you won’t always be able to control your hard costs. Inflation, rising interest rates, labour shortages, supply chain issues, and other global instabilities all translate to increased business costs. These unpredictable factors can significantly strain business owners, especially if your customers are also facing economic stress, which only adds uncertainty to your revenue side.

If you’re feeling the squeeze of rising costs, lowering the monthly payments for your debt obligations can take a considerable amount of pressure off your shoulders.

A customized financing plan can help you take advantage of flexible tools such as asset-based lending, which will allow you to consolidate debt into one lower monthly payment while leveraging the value of assets to free up working capital.

If you have multiple loans with different lenders or are working with a financial institution with rigid lending terms, you likely won’t have the opportunity to negotiate lower monthly payments.

Better Cash Flow Keeps You Competitive

A customized financing plan allows you to match your cash flow to your payment terms. This frees up your cash on hand, enabling you to respond to opportunities or challenges and invest in growth.

When everyone is dealing with the same unpredictable economic factors, businesses that can maintain cash on hand will have a significant competitive advantage. While your competition struggles with one-size-fits-all financing, your customized plan will help you come out on top.

You’ll be in a Better Position to Secure Future Financing

Another advantage of improving your cash flow with a customized financing plan? More cash on hand improves your balance sheet, which can help you unlock further funding.

Banks “lend by looking backwards,” relying on financial statements to make lending decisions. But this can quickly become a vicious cycle if you don’t have the right financing to begin with.

A one-size-fits-all financing plan from a bank can keep you locked in a cycle of shaky balance sheets, which hold you back from getting the working capital you need for growth. A customized plan, however, can help you break that cycle and position your business for bigger loans and better lending terms going forward.

Also, businesses with a limited financial history or in a recovery phase will benefit from working with a flexible lending partner that can create a custom plan that considers your opportunities, not just your past challenges.

With the myriad of unprecedented circumstances impacting the global economy, business owners have no choice but to get comfortable with uncertainty. But for many businesses, traditional banks don’t provide the flexible financing solutions they need to navigate these unprecedented times.

That’s why many business owners choose to work with a lender who can create a customized financing plan tailored to their business needs.

For more than 35 years, Essex Lease Financial has been building custom solutions for Canadian businesses. Whether you need to raise capital for growth or restructure existing financing, our personalized, flexible approach offers your business a competitive advantage in unprecedented times.

If you’re ready to work with a lender that works for you, contact us today to learn more or get started.