It’s often said that you need to spend money to make money. While that’s certainly true, it’s also unfortunately true that capital investments don’t always lead to great profits. To determine whether the investment makes sense for your business, you need to know whether your future gains will ultimately exceed the initial investment and other estimated costs—and if so, how long it will take to recoup them.
One way you can quickly evaluate the potential ROI of a major purchase before you pull the trigger is by calculating the simple rate of return. While the simple rate of return isn’t perfect and won’t take everything to account, it can be a method to measure whether a given project has high potential profitability and is worth further examination.
In this blog post, we’ll explore how the simple rate of return is calculated, what it means (and doesn’t mean) for your business, and why a great financing partner like Team Financial Group can help you make those major business investments that will drive future growth without putting your cash flows in jeopardy.
As the name suggests, calculating the simple rate of return is indeed very simple. Here’s a step-by-step breakdown of the formula:
This is simply how much you expect to increase your total revenue (or decrease your current expenses, for example by using automation to reduce labor costs) after an investment. For example, if you expect that new equipment for your factory or expanding your delivery fleet will allow you to generate $70,000 per year in new revenue, that would be your annual incremental revenue.
Here’s where it gets just a little bit trickier. Most major capital expenses cost you more than just amount of the initial investment. You need to consider other long-term costs that result from the purchase, including:
Let’s consider an example.
Say the cost of purchasing new equipment is $200,000, and you expect that it will also increase your operating expenses by $15,000 per year. You expect to get 10 years of use from it, and then sell it for $20,000, so the annual depreciation cost would be $18,000. ($200,000 cost – $20,000 salvage value / 10 years).
Add these two figures together, and you get annual incremental expenses of $33,000 per year.
If you’ve been following along so far, this step is easy—just take your annual incremental revenue and subtract your annual incremental expenses.
Using the examples above, if you estimate $70,000 in estimated annual incremental revenue and subtract $33,000 in annual incremental expenses, your annual net income would be $37,000.
Now, pull it all together. Take your annual net income and divide it by the initial cost of the investment. In this case, a $37,000 net operating income divided by $200,000 leaves you with a simple rate of return of 18.5 percent.
The value of calculating the simple rate of return for your investment is that it gives you a quick, easy, and usually reasonably accurate (if somewhat rough) assessment of whether a particular investment would likely be worth it in the long run.
Typically, a business might set a minimum rate of return to determine whether a given investment would be worth it, or if money and resources might be better spent elsewhere on a project with higher profitability. If your simple rate of return clears the minimum by at least a few points, there’s a good chance it’s worth more serious consideration.
That being said, the simple rate of return sacrifices precision to achieve its simplicity, so if you’re doing your capital budgeting and weighing one or more major purchases, you’ll probably want to do a more detailed analysis.
Some important things that simple rate of return doesn’t account for include:
Even if, hypothetically, an investment would make you more money in the long run, you’ll never get there if you can’t afford the initial expense in the first place or can’t get financing on favorable enough terms.
The simple rate of return formula assumes that the amount of the increase in annual revenues and expenses will be constant, but in practice this is usually not the case. It may take you a few years before you’re able to reach your new capacity with new clients or orders. Likewise, operating expenses may be greater in early years (if, for example, there are significant hiring, training, or set-up costs) or in later years (for example, if you anticipate maintenance costs to increase as equipment ages).
Money earned today is more valuable than money earned in the future. The biggest reasons are inflation, and the fact that money you have now can be invested and gain interest over time. But the simple rate of return formula counts all income the same, whether it’s earned tomorrow or ten years from now. In other words, it does not adjust the income to its net present value. As a result, simple rate of return may overstate the actual rate of return, particularly if you expect your investment to produce income over an extended period of time.
Major capital expenses are often necessary to help your business continue to grow and thrive. But identifying which investments will provide the greatest long-term profit is only the first step. Figuring out how you’re going to actually pay for them is just as important.
That’s why you need a financing partner who understands your business and can offer fast, flexible, and affordable options to help get your company from point A to point B.
In just over 20 years in business, Team Financial Group has helped companies just like yours secure a total $600 million in financing. We pride ourselves on being easy to work with, efficient, and fully committed to helping our clients achieve lasting success.
To discover how we can help you finance your next major equipment purchase or other capital expense, give us a call at (616) 735-2393 or complete this brief online application.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Originally opened in 1995, Bay Meadows Family Golf Course in Traverse City has grown into one of the premier “family-friendly” golf experiences in Northern Michigan. The property boasts 9-hole regulation and 9-hole par-3 courses, indoor driving range, and expansive indoor and outdoor practice facilities with four PGA instructors and state-of-the-art electronic teaching aids.
But Bay Meadows Family Golf Course didn’t start out that way. When Michael Husby and his wife, Judy, bought the course from a local bank in 2014, the property had suffered under years of neglect. The playing conditions were poor, as was the course’s reputation in the community. The Husby’s had big plans for Bay Meadows, but they needed a strong financing partner to help make these plans a reality.
Before the Husbys bought the course, it had been owned by a bank for five years. The course had received very little attention, and revenue had plunged.
“When I purchased the course, it was in very poor condition,” says Michael Husby. “The buildings, turf, and the equipment was in shambles. I needed to change the image of the operation immediately.”
Husby knew he would need to purchase several additional pieces of turf equipment to get the course conditions back up to par. Fortunately, he knew just who to call: Tim and Joe at Team Financial. He had previously worked with Team Financial Group as far back as 2003, and had known Team Financial Group founder Tim Maczka since the 1980s, when both lived in Gaylord, MI.
After getting competitive, flexible financing from Team Financial Group and purchasing five new pieces of turf equipment, course conditions significantly improved—and golfers started returning. More turf equipment purchases and course remodeling followed a few years later to keep the momentum going. But Husby had bigger plans.
In just a few years, Bay Meadows Family Golf Course was transformed from a deteriorating property with declining revenue into a popular course known for its excellent service, clean conditions, and friendly atmosphere.
In 2017, the course took another step toward regional and even national recognition with the addition of the Bay Meadows Learning Center. This state-of-the-art, indoor practice facility is staffed by four Professional Golf Association teaching professionals and includes video swing analysis, launch monitors, radar tracking, and other high-tech teaching equipment. The facility also includes four putting greens, practice bunkers, a 90-yard practice hole, and driving range.
“When I built the indoor facility, it was a gamble that required sophisticated, expensive equipment to be successful and produce the revenue required,” Husby says. “Again, Team Financial was there.”
The expansion was so successful, in fact, that it was featured in a 2019 special on the Golf Channel.
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Bay Meadows Family Golf Course has become a regional destination for all ages and ability levels. It’s a place where families can play together, beginners can learn the game, and serious golfers can hone their skills. The course and learning center have partnered with an array of junior and high school golf programs, helping to grow the game for the next generation.
“The success can be attributed to the tireless work from my wife & I, as well as four key employees. But we may have never reached our goals without the help of Team Financial. They trusted our plan and provided us excellent financial counsel, which has been invaluable as we grew” says Husby.
“The staff at Team is superb. The office personnel know me when I call or visit their headquarters, even though my business is 150 miles away. But most importantly, when Team Financial promises to get the job done, it is written in stone. Never have I waited for paperwork, money transfers, invoices, or documents when the loan is paid in full.”
What is Husby’s advice to other individuals and companies looking for financing help to make their own dreams a reality?
“If you want to establish a long-term relationship with a lender that will quickly respond to your needs, then you found it in Team Financial,” Husby says. “My experience with banks is they will always lend you capital, if you can prove you don’t need it. I work with a team that wants me to succeed as much as I do.”
Team Financial Group works hard to meet your business’ needs with fast and flexible financing options and the highest standards of customer service. From golf courses and manufacturing to agriculture and construction and more, we help companies across multiple industries purchase the equipment, vehicles, and tools they need to grow and thrive.
Ready to get started? Apply for financing now using our quick and easy online application, or give us a call at 616-735-2393 if you have questions.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Since being founded by a small team of data and communications professionals in 2003, Compass Communications Group has quickly grown into a premier communications solutions provider for senior living communities in Michigan and throughout the Great Lakes region.
In addition to wireless nurse call systems, Compass Communications Group provides access control, wander management, fall management, phone systems, CC camera systems, and other tools to help senior living and skilled nursing communities support the health and safety of their residents.
Skilled nursing facilities work hard to make their communities not only safe for residents, but also as comfortable and “home-like” as possible. But even after taking advantage of government incentive programs, upgrading technology can still represent a major capital expense and require additional financing.
During Compass Communications Group’s first few years in business, finding the right financing partner to help their clients purchase nursing call systems and other key tools was a major challenge.
“We tried a couple financing companies and it was a disaster,” says Robin Rosier, founding member and sales/account manager at Compass Communications Group. “Either I had to handle all the communication and financial paperwork with the client and do more work for little or no compensation, or the lender dropped the ball and I had to make excuses and chase folks down on both sides of the transaction.”
The final straw for one vendor, according to Rosier, was when the president at a major company called her to say that, if he didn’t know her personally, he’d never consider doing business with Compass again due to the way he was treated by the financing company representative.
Fortunately, things got a lot smoother once Team Financial Group entered the picture.
From the beginning, Compass Communications Group has believed in following the golden rule and approaching each installation as if they were working to keep their own family members safe.
That philosophy has helped Compass Communications Group build long-term, trusting relationships with their clients. And it’s why they demand the same level of dedication and integrity from their key business partners.
“Team Financial Group is a stellar finance partner,” Rosier says. “I can confidently turn over my clients to Joe (Smaby, Team Financial Group’s Vice President of Sales), knowing that he will handle everything professionally and treat my clients the way I would treat them.”
According to Rosier, multiple Compass Communications Group clients have commented about how smooth the approval process is with Team Financial Group.
More than 15 years later, the partnership between the two companies is still going strong. Team Financial Group has attended trade shows with Compass Communications Group over the years, and both companies keep each other in mind when networking and business opportunities arise that might benefit the other (or the other’s clients).
“We feel like Team Financial Group is part of our team,” Rosier says. “We would never consider working with anyone else.”
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At Team Financial Group, we offer a variety of fast, flexible financing terms and options to meet your business’ needs. Whether you need to finance heavy equipment, new office furniture, or have other specific needs, you can count on Team Financial Group to offer sound advice and sensible solutions.
Ready to get started? Apply for financing now using our quick and easy online application, or give us a call at 616-735-2393 if you have questions.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Whether you’re starting a new business, looking to grow and expand your capabilities, or simply trying to ensure you always have quality equipment to do the job, choosing the right supplier for your business needs is critically important.
Whatever your equipment needs may be—manufacturing or construction equipment, work vehicles, office furniture, etc.—a good supplier can provide you with exactly what you need, when you need it. The wrong supplier might mean costly delays, poor quality equipment and raw materials, and an inability to meet your growing needs.
Are you evaluating potential suppliers and not quite sure which one to choose yet? Read on for five practical tips to help narrow down your shortlist. If you’re a business owner who needs help selecting the right supplier for your organization, reach out to Team Financial Group. We’re always happy to help.
Before you even start to look at suppliers, you need to look carefully at your own company. What are your current equipment needs? And if your business continues to grow, what do you project your needs might be in a few years?
Don’t just look at the specific equipment being purchased. Also consider things like:
The best supplier for your business is likely going to be one with a wide range of equipment offerings that not only suit your needs today, but can continue to partner with you as your business grows.
While, of course, it’s always possible (and sometimes inevitable) that you might need to change to a new supplier, being able to maintain a strong relationship with a single supplier over a long period of time often translates into greater efficiency, cost savings, and productivity versus constantly changing suppliers every few years.
If you’ve been in your industry for decades, you might feel like you have a good handle on what’s out there. But if you’re a small business or startup, you might not know what kinds of suitable suppliers are even available to you.
So, if you’re feeling a little out of your depth with the sourcing process, don’t just sign up with the first supplier you find on Google that seems to have what you need. Some additional ways to find potential suppliers include:
Even if a supplier seems like they meet all your requirements, you still need to do your research. Is this a reputable and reliable supplier? Can they really deliver everything they promise to deliver?
Remember: research takes time. We know it can be frustrating. But when you choose a supplier, you’re making a huge investment of time and capital that will have significant ramifications for your business. Investing a little extra time upfront for the supplier selection process is more than worth it in the long run.
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For many organizations, finding the right partner is about more than simply the cost of goods or even the best possible return on investment, absent any other considerations.
For example, if environmental sustainability and local community support are important corporate values, you’ll want to choose suppliers that share these commitments. Consequently, you might choose a supplier that demonstrates a commitment to reducing industrial or packaging waste. Or, you might choose to limit your supply chain to the local area whenever possible to support the local economy and cut down on shipping mileage.
Obviously, cost is going to be a major consideration when looking for a supplier. After all, the entire point of investing in equipment is to, eventually, make money. Any company you choose must be able to deliver equipment that fits within your budget and doesn’t overextend your cash flow.
However, many companies become so fixated on the sticker price that they end up making a poor choice. The cheapest option upfront isn’t always the best choice. In fact, it often isn’t even the cheapest once all the “hidden” costs are considered.
If the supplier provides low-quality equipment that requires frequent repair or replacement, for example, the total cost to your business (including both actual expenses and opportunity cost from avoidable delays or shutdowns) can be much higher than working with more expensive suppliers.
Remember, too, that when you work with an honest, reputable, and flexible financing partner like Team Financial Group, you can discover the options that fit both your business needs and budget.
RELATED: The Beginner’s Guide to Commercial Equipment Financing
Finding the right supplier for your business is often a complex and difficult process. But securing fast, flexible financing to pay for that equipment doesn’t have to be.
Since 2001, Team Financial Group has provided more than $600 million in financing in almost 10,000 different deals across Michigan and the Midwest. We partner with businesses large and small, in industries as diverse as manufacturing, construction, energy, agriculture, technology, and more.
We’re independently owned and completely dedicated to helping our customers grow their businesses with financial options that are customized to meet their unique business and financial needs.
To discover how we can help you finance your next major equipment purchase, give us a call at (616) 735-2393 or complete this brief online application.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
When Tim Maczka co-founded Team Financial Group in 2001 with partner Joe Smaby, they went through common growing pains many small businesses endure in their early years—along with a few additional responsibilities that might have been more unique, such as babysitting and mowing lawns.
But over the course of the past 20 years, Team Financial Group has provided more than $600 million in funds with the goal of helping customers grow their businesses. Team Financial Group’s mission has remained the same since Day 1: delivering efficient, flexible financing while applying common-sense lending principles.
Here, we catch up with Tim, who tells us a little more about himself, the early days of Team Financial Group, and what the future holds for the company under CEO, President, and son Matt Maczka.
Tim Maczka has more than 40 years of financial services experience and holds a bachelor’s degree in finance from Central Michigan University. As the co-founder and chairman of Team Financial Group, Tim works closely with all aspects of the business, including funding, underwriting, and portfolio risk management.
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What can you tell us about your background before you co-founded Team Financial Group?
I was a commercial lender, along with many other hats I wore, at Old Kent Bank during my 26-year career there. When Fifth Third Bank bought Old Kent and I left, I was excited to start Team Financial Group, even though the thought was nerve-wracking at the time because I had three kids in college. But I had a 52-week severance package and convinced my wife that I would know in a year how we were doing, and I would get another job if necessary. Twenty years later, here we are.
Tell us how the founding of Team Financial Group came to be?
There were five of us that started out, and Joe Smaby was my partner. He had worked at Old Kent Bank for 13 years, mostly in sales. I was the underwriter and funder, Joe was the sales guy, and away we went.
We didn’t have anywhere to go yet, so we started in Joe’s basement in May 2001. We quickly knew we had to get out of there, because his wife started using us as a babysitter. Those first few months, we traded Saturdays for who would mow the lawn. We wore every hat and tried to save as much as we could. Some good memories there.
What were the early days like at Team Financial Group?
We were calling on all sorts of vendors and partnering with them to offer equipment financing. We had some really good calls early in our startup days. With one company, Michigan Office Solutions—at that time they were called Commercial Equipment Company—we worked out a program for us to do all of their municipal financing, which was a huge opportunity and boost in the early stages of the company.
What was it like having your son, Matt, rejoin Team Financial Group?
I was 48 years old when we started the company, and one of the first things I wrote on a notebook I kept on my desk was “succession.” Matt was working as a civil engineer in Indianapolis, and I kind of wrote him off as a possibility. But after nine years working in the construction industry, Matt told me he was getting a master’s degree in finance. I thought to myself, “Wow, that’s interesting.” When he was done with school and said he was interested in coming to work with us at Team Financial Group, I remember thinking, “Yes, my prayers have been answered.” It’s been a blessing for all of us. Matt fit right in, came in with an eagerness to learn and a humbleness that made it really nice.
How have you seen Team Financial Group change in the past few years?
System-wise, Matt brought in a lot of operational expertise. We went through a complete conversion of all our systems. I remember at the time Matt joined us, I think we had about $50 million in assets, and he wrote on a whiteboard right away, “What does $100 million look like?” Joe and I got a little nervous about that, but it was good. We always had a lot of hustle, but Matt brought an aggressiveness that we didn’t always have.
What are you most proud of regarding Team Financial Group?
That we’ve been here for 20 years. The failure rate of small businesses is fairly high, so the fact that we’ve built a business that is stable and growing and well capitalized is a compliment to all of us and our customers. We’re pretty proud of that.
When you put the numbers to it, over $500 million in capital to small businesses, not just in West Michigan, but all of Michigan, is pretty exciting. On the employee side, we have employees that started right out of school. (Accounting Manager) Tanya Schulz been with us for 19 years. If you look at the longevity of our employees, it’s pretty exciting too.
What does the future hold for Team Financial Group?
I think we’re just getting started. The management team keeps getting better. I think there’s an old saying that goes, “The first generation starts a business, the second generation grows it.” Matt is definitely poised to take us to the next level, no question about it.
What do you like to do away from office?
My wife and I like to bicycle, golf, and we love our nine grandkids. Our world kind of revolves around that. We’ve been going on these bike tour trips, starting about 10-15 years ago, and we go to great places. We’re going to Yellowstone National Park on a bicycle trip next year. We like outdoor activities. We live on a lake, and that’s a magnet for our grandkids, so we like that. Our church is a big part of our life, too.
For us, it’s all about our customers and employees. We feel strongly about our accomplishments. That’s really the bottom line. Take care of customers and they’ll take care of you.
At Team Financial Group, we work with clients to identify and customize financing solutions that meet their unique needs. Our commercial equipment financing options can improve your business’ cash flow and overall financial health.
To get fast, flexible financing today, please complete this brief online application.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
If you’re a regular follower of the news, then you likely have come across more than a few stories about cryptocurrency. This digital-based market is sure to evolve and grow in popularity in the coming months and years and, as a result, you might be wondering if cryptocurrency lending is right for your business needs.
You also might be simply wondering, “What is cryptocurrency lending?”
Unlike traditional stocks, bonds, and mutual funds, cryptocurrency lending offers a number of financing benefits that may appeal to small businesses and startups, including short-term flexibility, low interest rates, and convenience. However, crypto lending platforms also contain elements of risk that are important to understand before you make any sort of digital transaction.
Here, we’ll outline some of the key terms used in the crypto marketplace, and identify how crypto lending differs from traditional financing, including potential pitfalls. If you’re unsure about your options, you may want to consider consulting with an experienced and reliable financing partner like Team Financial Group to learn more about all your financing choices.
For all the buzz surrounding crypto, it still can be a confusing world filled with strange names and acronyms. Here’s a quick rundown of common terms that you might come across as you research cryptocurrency lending as a financing option.
Cryptocurrency
A digital or virtual currency (aka “money”) stored, created, and processed by cryptography, making it difficult to counterfeit or duplicate. Crypto assets operate with a decentralized finance structure that allow them to operate outside of many government rules and regulations. Examples include Bitcoin, Ethereum, Dogecoin, Litecoin, and Ripple.
Stablecoins
Cryptocurrencies that are backed by more traditional government-issued fiat currencies, such as the U.S. dollar, meaning their prices remain steady. Examples include Tether and Dai.
Digital assets
Digital material and assets that hold some sort of value and are owned by a company. This might include photos, videos, PDFs, logos, illustrations, audio content, even spreadsheets and Microsoft Word documents.
E-lending
E-lending is similar to a traditional mortgage application process. However, lenders are virtual and do not have a physical branch, office, or location. Communication with crypto loan processors and brokers are conducted via email, phone, or online chat.
Blockchain technology
The technology at the center of most digital currencies facilitates the process of recording transactions and tracking assets with a digital ledger of data that can be duplicated and distributed across a business network.
Fintech
Financial technology refers to a financial services company that integrates technology into a product or service in order to improve its functionality and speed up delivery to customers. Fintech examples include lending-as-a-service apps, alternative lending, and crowdfunding.
Smart contracts
A term used to describe computer code that automatically executes an agreement and is stored on a blockchain-based platform. Details of the loan amount, agreement, and repayment terms between borrowers and crypto exchanges are directly written into the code.
Distributed ledger technology
A digital system for recording asset transactions with details and information recorded in multiple places at once. Unlike traditional databases used by banks and financial institutions, a distributed ledger is a decentralized network, meaning there is no conventional data storage or administration functionality.
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While blockchain lending might seem like an appealing choice for small businesses, there are a number of potential crypto lending risk factors that borrowers should note compared to more traditional financing options.
Unpredictable values: The volatility of the crypto markets makes it more risky than traditional investing. Take bitcoin, for example. At one point in 2017, a single bitcoin was worth almost $20,000. Then, in 2018, bitcoin value dropped to $3,100, wiping out billions of dollars in the cryptocurrency market. Those kinds of losses resulting from price fluctuations can be devastating to small businesses.
Security concerns: Cybersecurity should be a concern for businesses of any size, especially when it comes to cryptocurrency lending. If you do decide to explore crypto loans, it is important that you put procedures in place to protect yourself from fraud, hacks, and other potential cyberattacks.
Lack of regulation: Lawmakers are starting to put more stringent rules and regulations in place at the state and federal levels, so borrowers will need to be prepared to adjust quickly as crypto lending changes.
Technical knowledge: The crypto marketplace also seems to change by the minute, meaning digital tools need to be consistently established, maintained, and updated. This constantly evolving landscape requires an extensive amount of research and vigilance for crypto loans, which may be a challenge for small businesses with limited resources.
Uncertain future: While cryptocurrency lending provides a number of appealing options and choices for businesses looking for financing flexibility, it still remains a relatively new marketplace. There are a lot of unknowns, meaning there are just as many potentials risk as there are rewards. You could say the old saying, “We don’t know what we don’t know,” definitely still applies.
While cryptocurrency lending may be an intriguing option for small and midsize businesses looking for new ways to foster growth, a financing partner like Team Financial Group offers significant benefits that blockchain lending cannot provide.
We’ve worked with businesses across dozens of industries and provided financing for companies with a wide range of credit scores and histories. As an independent financing partner, we have more flexibility than a bank, so we treat you as more than just a credit score. Instead, we look at the whole picture of your business, your team, and your annual revenue to find a financing option that works for you.
Additionally, if you’re a vendor, here are just some of the reasons why working with Team Financial Group as your financing partner can benefit your business and your customers:
Still have questions about cryptocurrency lending or any of your potential equipment financing options? Let us know. We can help you learn more so you can understand all your options and make an informed choice for your business.
At Team Financial Group, we work with clients to identify and customize financing solutions that meet their specific needs. Our commercial and office equipment financing options can improve your business’ cash flow and overall financial health.
If you’re not sure which type of equipment financing option is right for your business, just get in touch with our experts. We’ll talk with you, learn about your company, and come up with a financing strategy that makes sense for you. To discover how your business can get fast, flexible financing today, please complete this brief online application.
References
Locke, T. (2021, Jan. 9). “Thinking of buying bitcoin? What experts say about big crypto concerns: ‘You have to be mentally prepared.’ ” CNBC. Retrieved from: https://www.cnbc.com/2021/01/09/what-experts-say-about-cryptocurrency-bitcoin-concerns.html
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
As a growing business, you need to get your operations up and running as quickly as possible. However, you might quickly discover that related expenses exceed your cash on hand. Rent and utilities for office spaces are an obvious drain for small business owners, but office equipment and furniture costs also can add up in a hurry.
For example, depending on your specific business needs, you may need to supply each employee with a computer, desk, and chair. There also can be shared equipment like printers, copiers, servers, and maybe even a refrigerator and fancy coffee maker for your office break room.
Running a small business is expensive. But there are solutions available that can help you get off the ground, and one of those options is financing your office equipment.
Here, we’ll outline the benefits of office equipment financing and why it might make sense for you. If you need help with an equipment loan for your small business, the experienced lenders at Team Financial Group can help you find financing solutions tailored to meet your unique needs.
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Even if your office isn’t that large, there is a wide variety of business equipment you could consider adding to your shopping list. In addition to the examples listed above, here are some other potential items you could choose to finance:
As you can see, it doesn’t take much for office equipment costs to stretch into the tens of thousands. That’s why many new and small businesses explore the flexibility that comes with equipment financing.
RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow
Instead of renting your office furniture and equipment, which is typically too expensive to be a viable long-term option, take advantage of these five key benefits that come with business equipment financing:
RELATED: Get These Tax Benefits With Commercial Equipment Financing
At Team Financial Group, we work with clients to identify and customize financing solutions that meet their specific needs. Our commercial and office equipment financing options can improve your business’ cash flow and overall financial health.
If you’re not sure which type of equipment financing option is right for your business, just get in touch with our experts. We’ll talk with you, learn about your company, and come up with a financing strategy that makes sense for you. To discover how your business can get fast, flexible financing today, please complete this brief online application.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Twin brothers Nathan and Norman Miller put their dreams on the line in 1998 when they built a new workshop and entered the firewood industry with the creation of DYNA Products.
The Millers centered DYNA Products around their strong faith, building a robust company culture dedicated to providing quality products at a fair price and backed by superior customer support. Thanks to that approach, DYNA Products is now one of the top manufacturers of world-class firewood processing equipment, with a 37,000-square-foot facility located in Millington, Michigan.
More recently, DYNA Products has enjoyed significant growth in both the manufacturing sector and the rental market. As a result, they needed additional equipment that required significant capital. That’s when they turned to Team Financial Group.
The seasonal nature of DYNA Products’ business, along with complexities related to depreciation and equipment life cycles, often made it difficult for them to work with a bank. They wanted to find a partner who would understand their strategy and direction, and then could provide tailored terms to help maintain their growth.
After listening carefully to DYNA Products’ needs, Team Financial Group was able to provide fast, flexible financing that helped the company buy updated manufacturing and expand its rental fleet.
“We appreciate the values that Team Financial Group adhere to and the company’s emphasis on personal relationships,” DYNA Products CEO Nathan Miller says. “Ultimately, Team Financial Group understood our needs and core business strategy and believed in us. They offered competitive rates and service that blew the banks out of the water.”
“I would advise other companies to take a look at Team Financial Group and let them have a chance to prove their value,” Nathan says.
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At Team Financial Group, we offer a variety of fast, flexible financing terms and options to meet your business’ needs. Whether you need to finance heavy equipment, new office furniture, or have other specific needs, you can count on Team Financial Group to offer sound advice and sensible solutions.
Ready to get started? Apply for financing now, using our quick and easy online application, or give us a call at 616-735-2393 if you have questions.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.
Leasing equipment is a popular way for small businesses to acquire the assets they need to operate without purchasing these items upfront. While this can be a cost-effective strategy to foster growth, it’s important to understand all the details and options available before entering into a lease agreement.
The differences between capital and operating leases can be confusing but nonetheless it’s important to know the different nuances involved to help you make the right choice for your business.
Below, we’ll outline the differences between a capital and operating lease, along with the benefits associated with each. If you still aren’t sure if one of these options is best, you can consult with an experienced lender like Team Financial Group to help determine your next step.
There are a number of key differences to note if your business is trying to determine if it wants to use either an operating lease or a capital lease.
Operating leases are similar to renting, with lease payments treated as operating expenses. Lessees can obtain and use assets for a set period of time, but there is no transfer of ownership rights. Common assets for operating leases include technology, vehicles, and office equipment.
Compared to operating leases, a capital lease are treated more like a loan and would be considered debt. Assets are owned by the lessee rather than the lessor and typically are used for equipment that will be kept long term. To be classified as a capital lease, these conditions must be met:
The accounting treatment between an operating lease and capital lease is also handles differently. For operating leases:
For capital leases, which sometimes are referred to as “finance leases”:
Depending on your equipment requirements, your business may choose either an operating or a capital lease — or maybe even a combination, depending on the types of assets you need.
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There are a number of benefits associated with both operating and capital leases that might influence the decision-making process for your business.
Here are some of the advantages of using an operating lease:
Meanwhile, the benefits of a capital lease include:
Here’s an example that might resonate: You could use an operating lease for a copier or other technology for your office, while a capital lease may make more sense for a bulldozer or telehandler if you are in the construction industry. Ultimately, the decision is very unique to your business and all considerations need to be taken into account when determining which is best for you.
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Need assistance determining which type of financing lease option makes the most sense for your business? We can help you learn more about a capital vs. operating lease and determine if one is right for you. We also specialize in offering fast and flexible equipment financing for a wide range of small businesses.
Call Team Financial Group today at 616-735-2393 or fill out our contact form to talk with a financing expert. If you’re ready to apply for financing, fill out our short online application and we’ll get the process started.
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.
While the long-lasting effects of the coronavirus pandemic will continue to be felt for months and years to come, there is a reason for optimism as we head into the summer months. That is certainly true when it comes to commercial lending.
According to the Equipment Leasing and Finance Foundation (ELFA), COVID-19 may have “accelerated digital adoption by seven to 10 years.” The result? An estimated $1.8 trillion is expected to be spent on capital goods and fixed business investments this year, with many of those assets needing some sort of financing solution.
In this blog, we’ll outline how businesses have adjusted their operations due to the coronavirus and why they are re-examining their equipment needs. If you need help determining if your business needs to re-think its leasing and financing strategy, you may want to reach out to an experienced independent commercial lender like Team Financial Group to learn more about your options.
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One of the biggest impacts that COVID-19 had on businesses of all sizes, was an increase in the mobile workforce and how operations subsequently reconfigured their technology equipment to continue running smoothly. With many employees forced to work out of their homes for long stretches, businesses had to quickly adjust their resources so remote workers could continue to do their jobs.
As remote workers are starting to return to the workplace, businesses will need to determine if their technology equipment needs to be updated or expanded again. Even businesses that embrace a hybrid work model will need to evaluate if their equipment is flexible enough to allow workers to successfully operate both remotely and at the office.
And how are businesses going to acquire that technology equipment? The vast majority – nearly 8 in 10, according to the ELFA – will use some sort of equipment financing solution to modernize operations and boost growth.
The coronavirus pandemic forced many businesses to rethink their business operations. While things haven’t necessarily returned to normal just yet, more companies are beginning to invest in equipment and software to meet increased demand and build for the future.
As a result, here are four commercial lending trends that we’ll be keeping our eye on throughout the rest of 2021 and beyond:
RELATED: How to Choose the Right Commercial Lender For Your Business
Need help determining how recent commercial lending trends might affect your business? We can help you stay ahead of the curve. We specialize in offering fast and flexible equipment financing for a wide range of small businesses.
Call Team Financial Group today at 616-735-2393 or fill out our contact form to talk with a financing expert. If you’re ready to apply for financing, fill out our short online application and we’ll get the process started.
References
For Construction Pros. (2021, January 25.) “Top 10 Trends That Will Influence Equipment Acquisition in 2021.” Retrieved from: https://www.forconstructionpros.com/business/business-services/financing-insurance-leasing/press-release/21244352/equipment-leasing-and-finance-association-top-10-trends-that-will-influence-equipment-acquisition-in-2021
Vogt, A. (2020, November 18.) “5 Ways COVID-19 is Shaping the Equipment Finance Company of the Future.” Equipment Licensing and Finance Association. Retrieved from: https://www.elfaonline.org/news/industry-news/read/2020/11/18/5-ways-covid-19-is-shaping-the-equipment-finance-company-of-the-future
The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.