Managing your cash flow in your everyday operations is extremely important to your company’s success, and even more so when things start to get tight in terms of your ability to pay bills. Different articles we have written touch on this topic, but in this article, we want to outline six specific ways to help better manage your cash flow.

1. Accounts Payable and Accounts Receivable

Most every company will have accounts payable and accounts receivable. Payment terms differ greatly between certain industries and can also differ from company to company.

Accounts Payable

Managing your payments can be a vital source of cash flow. While we don’t recommend “slow-paying,” sometimes paying early can be harmful to your cashflow.

For example, let’s say you purchase material from a company, and the payment terms are net 30 days. If you pay in 10 days without the option of a discount, that is 20 days early.

Above all, communicating with your trade partners is key. If you regularly paid in 10 days and now expect to start paying in 30 days, make your partner aware of that. (They are also working to manage their cash flows). Setting up automatic payments can also take some of the busy work away and eliminate human error.

Accounts Receivable

Just as managing when you pay is important, it’s also vital to manage when you get paid. Again, different industries have different business norms for payments terms, but late payments are never okay when trying to manage cash.

If late payments are an issue, then ask: Why are your customers paying late? Poor invoicing? Lack of clarity? Poor collections strategies? Lack of flexibility?

Offering a discount may be an option. 2/10 net 30 means you will give your customers a 2% discount if they pay you within 10 days of the invoice. This can help increase cash flow, but it will cut into your profit margin, which is something you need to consider.

2. Just-in-Time Inventory Management

Inventory management can also provide some much-needed cash flow. If you apply the just-in-time inventory management model, then your company will purchase inventory only when it’s needed.

While this approach is great in theory, it’s not easy to accomplish. Succeeding with the just-in-time model takes an extensive knowledge of your sales pipeline, manufacturing timeline, and supply chain. When implementing this strategy, many companies run into issues, like not having a part or material. Sometimes, these inventory issues hold up an entire project and delay delivery.

However, if executed properly, the just-in-time strategy for inventory management can save you much-needed cash by eliminating excess inventory and freeing up storage space.

3. Working Capital Line of Credit (LOC)

Opening a working capital line of credit with your bank can help you manage your cash position. Most working capital LOC accounts have a variable interest rate and are secured with an “all asset filing” by your bank. The draw limits are often tied to your inventory and receivables balances (example — 50% of inventory and 75% of receivables).

One of the main advantages of a working capital LOC is that it creates flexibility. There are few limitations on what you can spend the money on as long as the expenditure has to do with your business’s operations.

4. Using Term Debt for Your Cap Ex

You can take advantage of long-term financing to finance different capital expenditures instead of using the cash you have on hand. We have written an entire blog article on this topic, which we suggest reading.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

5. Extending Credit to Customers Who Are Credit-Worthy

Late-paying customers can hinder your company’s cash flow, so you need to understand the full picture of a customer’s creditworthiness before you give them credit terms. Companies such as Dun & Bradstreet and Paynet will give you a report on the creditworthiness of your customers. If you do not have access to those resources, you can ask yourself the following questions about new customers:

The answers to these questions should provide you with a general idea of the creditworthiness of your potential customer.

6. Manage Expenses

Managing expenses is not only important on a day-to-day basis, but there may need to be budget cuts depending on your company’s situation. While ideas in this article can help you manage your expenses, it is up to you as a business owner to decide which expenses you can cut without hindering the operations, morale, and overall health of your business.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

Partner With Team Financial Group and Get Fast, Flexible Financing Today

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, fill out our simple online application and let us do the rest.

The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.


Small businesses can become cash-strapped for lots of reasons, some of them beyond your control: seasonal fluctuations, natural disasters, and world events (we’re looking at you, COVID-19). If your business needs to cut costs, it’s important to do so with a coherent plan in mind — you don’t want to hurt your business’ long-term viability when you make sacrifices for the short-term.

In general, small business owners have a few primary areas where they can cut expenses:

In this article, we’ll give you nine tips you can use to evaluate your expenses and implement sensible cost-cutting measures.

#1: Reduce Nonessential Expenses

Now is the time to keep a tight hold on the company credit card. Check every discretionary expense to look for ways you can save. Unless a particular expense is critical to your business’ health and development, you should reduce or eliminate it.

Even if you’ve already signed a contract or made a commitment to spend money, don’t write off that money as spent and gone. If you contact the other party or service provider and explain your company’s current situation, they may be willing to cancel the contract or renegotiate its terms or interest rates, especially if they’re a long-term partner or are likely to become one. In the end, they may say no, but it never hurts to ask.

#2: Consolidate the Business Expenses You Can’t Cut

Even the most cash-conscious businesses have to make nonessential expenditures once in a while. If you can’t get rid of an expense, look for ways to consolidate.

For example, maybe you’ve determined you can’t do away with every celebration and team-building event because it would damage employee morale. Rather than canceling these events entirely, look for ways to combine them and reduce their frequency for an overall cost savings. You can also try to combine social activities with employee training sessions and other vital employee development efforts.

#3: Look for Ways to Save on Office Space

If you’re dealing with a down market or economic downturn, then chances are your business isn’t the only one hurting. The upside of a bad business climate is that prices for office space and commercial real estate tend to fall. You may be able to use this to your advantage and negotiate with your landlord for a better lease or move to a newer, more budget-friendly space.

If you run a solo operation or a small business with very few employees, it might be time to reconsider whether you need an office. Doing business out of your home can save you a fortune in rent, and it can also open up various tax breaks and deductions. Just make sure to do some research before you make the move — in many areas, zoning issues and local bylaws restrict the type and scale of businesses that you can operate out of your home.

RELATED: 5 Tips to Improve Your Personal Credit Score

#4: Re-Examine Your Advertising Costs

Don’t stop advertising altogether just because you’re cutting costs — marketing is essential to your business’ long-term health and growth. However, marketing can also burn up a lot of money, so you need to judicious with your budget.

More and more businesses connect with the majority of their new customers online, and digital advertising is often much more affordable and cost-effective than traditional media like billboards and TV ads. If you’ve been spending money on expensive ad space like a billboard or newspaper ad, you can probably cut that expense, take half of it and reinvest it in your web presence, and still get more long-term value than you were before.

Even if your business doesn’t have a website and you can’t afford one right now, you can still start building a web presence. You can create business pages and profiles on social media sites like Facebook, Yelp!, and Google My Business for free and start connecting with potential customers online.

#5: Try to Reduce Your Debt

If you’re behind on the bills and creditors are calling, you may want to ask whether your creditors are willing to restructure your debt or provide some payment relief. This strategy will probably work better with some types of creditors than others; a credit card company probably won’t offer you much help, for example. However, lenders and independent financial partners like Team Financial Group have many different options available to help you in these types of situations. We would always rather work with a customer than see them fail.

The most important element to working with your creditors is communication. The sooner you let a creditor know that you may have trouble making payments, the better. If you can work with your creditor and come up with proactive solutions before you start missing payments, then you may be able to avoid consequences like negative items on your credit history and collection actions.

#6: Be Careful About What You Buy

Your business can’t stop spending money altogether. You still need to pay for the essential equipment you need to do business, whether it’s maintenance, upgrades, or purchasing new equipment that you absolutely need. You also need to pay for essential business costs like phone and internet service, utilities, custodial services, and payments to vendors.

However, just like we discussed with real estate, an overall down market can give you some leverage to renegotiate prices on essential expenditures. Your vendors and partners may give you a lower price if you make it clear that it’s necessary. And don’t be afraid to shop around — now is the time to take bids and re-evaluate vendor relationships to see whether they still make sense for your business. This advice holds true whether your business needs to purchase heavy equipment or small office supplies.

You also don’t have to sacrifice your business’ bottom line to get the equipment you need. At Team Financial Group, we specialize in providing fast, flexible equipment financing for businesses of all sizes. We can work with you to find an affordable, customized financing option that makes sense based on your business’ current financial situation and unique needs.

#7: Lower Your Insurance Costs

Since insurance is so essential for any business, it can be an easy area to overlook when trying to save money. Under no circumstances should you eliminate essential coverage for natural disasters, theft and vandalism, or liability. However, you may be able to reduce your payments, even for essential coverage.

Check out some different insurance providers and try to find the most competitive rates. Then, ask your current provider if they can match that rate. You can also take stock of your policies to make sure you don’t have any redundant coverage and look for opportunities to consolidate policies under a single carrier. And if you’re in a bind and still need to cut insurance costs further, you could ask about increasing your deductibles to lower your premiums.

#8: Consider Personnel Changes

It’s not fun to think about laying off employees, but if your business is facing serious cash flow challenges that threaten your survival, you may have no choice. Ask how busy your employees are and whether every position is truly essential. Consider every option as being on the table, whether it’s consolidating positions, moving full-time employees to part-time work, or hiring freelancers.

But before you fire someone who’s not as productive as you’d like, make sure the problem lies with the employee. Ask whether your staff has the tools they need to get their work done efficiently. Look for inefficiencies, distractions, and timewasters within your company policies and culture, whether it’s meetings, departmental structures, or communication practices. You can downsize your team, but if you’re not putting employees in a position to succeed, you won’t get outstanding results from a team of any size.

#9: Cut Employee Perks and Benefits

Slashing benefits hurts, but most employees can handle it if they understand that it’s temporary and may be saving their jobs. During a crisis, you may need to suspend certain employee benefits. Don’t sacrifice your employees’ health plan unless it’s the only way to survive — losing health insurance puts your employees in an extremely risky position and could drive away your best workers. However, it may be appropriate to suspend or reduce other benefits and perks like free meals in the breakroom, employee wellness programs, and gym memberships.

Be transparent with your employees about the company’s current cash flow and financial situation. Let your workers know why you’re changing their benefits and how long they can expect the changes to last. If you’re going to make policy changes that make life harder for your employees, the least you can do is be honest with them throughout the process.

Partner With Team Financial Group and Get Fast, Flexible Financing Today

At Team Financial Group, we offer flexible payment terms tailored to meet your business needs. Even if you have a low credit score, don’t get discouraged — our commercial financing experts are here to help, and we’ve been able to provide financing for businesses with all types of unique circumstances. Our application process is easy and won’t affect your credit score, so apply today to get started.

If you have any questions about the financing application process or which financing option is right for your business, fill out our online contact form or call us at 616-735-2393. We’d love to chat with you about your options.

The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.

If your business needs new equipment, you probably want to know about your financing options. In this blog article, we’ll break down the similarities, differences, and pros and cons of two of the most popular equipment lease options: $1 buyout leases and fair market value (FMV) leases.

What Is a $1 Buyout Lease?

A $1 buyout lease is a type of capital lease, which means you own the equipment or property throughout the life of the lease (and afterward too). The leased equipment will show up on your balance sheet as an asset. A $1 buyout lease can also go by other names; you might hear it called a capital lease or an equipment finance agreement (EFA).

Compared to a typical operating lease, where you strictly lease the equipment and the leasing company or financing partner (the lessor) still owns the asset, a $1 buyout lease “feels” more like a loan.  The lease gets its name because, at the end of the lease period, you’ll complete the payments on the asset for a nominal price, often $1.

But when it comes time to make monthly payments (or however often your lease term specifies), the $1 buyout lease resembles a lease more than a loan. Your $1 buyout lease won’t have stated interest rates like a loan would. Instead, you’ll make fixed payments, and the finance charges get rolled into your payments.

So, you can think of a $1 buyout lease (a.k.a. equipment finance agreement) as a sort of hybrid between a loan and a lease. You may be able to get 100% financing with no down payment and fixed payments like you would with a lease. However, you own the equipment from the time of purchase, and the equipment appears on your balance sheet, similar to a loan.

Business owners who are purchasing equipment tend to like $1 buyout leases because they’re straightforward, streamlined, and easy to understand. Also, when you finance an equipment purchase with a $1 buyout lease, you may be able to write off the entire cost of the equipment in the first year as “bonus” depreciation under the Tax Cuts and Jobs Act. This bonus depreciation is available for any qualified asset that you purchase and put into use before 2023.

Why Would I Want a $1 Buyout Lease?

Since you own the equipment, a $1 buyout lease often makes sense when you’re looking to purchase a piece of equipment that will stay in use for many years and retain most of its value.

Examples of the types of equipment we’ve helped clients acquire with $1 buyout leases include:

What Is an FMV Lease?

A fair market value lease (FMV lease) can be a type of operating lease, which means it functions more like a rental agreement compared to a $1 buyout lease. With an operating lease, you don’t own the equipment you’re leasing. However, the payment structure is similar to a capital lease (like the $1 buyout lease): you may be able to get 100 percent financing with no down payment, and you’ll make fixed payments until the end of the lease term.

At the end of the term, you’ll usually have the option to purchase the equipment at the current fair market value (FMV), which is where the FMV lease gets its name. You can also choose to continue making your lease payments and using the equipment. If you don’t want to exercise your purchase option or continue leasing the equipment, you can return it and walk away. FMV leases tend to last between one and five years.

Why Would I Want an FMV Lease?

So, why would you want to lease without the benefits of ownership? For some types of new equipment that go out of date quickly and lose most of their value, ownership doesn’t have many benefits.

Think about a computer as a classic example: when you buy a new computer, it will lose most of its value in the first few years, so you can’t resell it for anything close to what you paid for it. In five to ten years, technology will move on to the point that the computer will have almost no resale value, no matter how cutting-edge it was when you bought it.

Other equipment types that we’ve helped customers acquire with FMV leases include:

Comparing FMV and $1 Buyout Leases

Which type of equipment financing is right for your business? Both FMV leases and $1 buyout leases have pros and cons:

FMV lease:

$1 buyout lease/equipment finance agreement

Which solution works best often comes down to the type of equipment you want to finance. An FMV equipment lease usually makes sense if your business needs to stay current, and you update equipment frequently. If you plan to use the asset for a long time or think you can sell it for a good value when you’re finished using it, then a $1 buyout lease may be the best solution.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

Contact Team Financial Group to Learn About Your Equipment Financing Options

Have questions about which type of financing option makes sense for your business or whether you qualify? We’re here to help. Call Team Financial Group today at 616-735-2393 or fill out our contact form to talk with a financing expert from Team Financial Group. And if you’re ready to apply for financing, fill out our quick online application and let us do the rest.


IRS. New rules and limitations for depreciation and expensing under the Tax Cuts and Jobs Act [press release]. (2018, April). Retrieved from

The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.

If you own a small or medium-sized business, your personal credit report is vitally important. A great credit score can not only help you receive a loan but also improve the interest rate you pay on that loan. For a more in-depth overview of how your personal credit can affect your business, read our previous article, “Credit Check: Will My Personal Credit Affect My Business Loan?

For a quick overview, keep reading. In this article, we’ll give you some practical tips to improve your credit score fast so you can reap the benefits and save money.

1. Keep Your Credit Utilization Low

Credit utilization is a measurement between two factors: current credit card debt and credit card limits. For example, a person with $500 in credit card debt with a $5,000 limit has a credit utilization rate of 10%, which is very low. A low credit utilization gives you flexibility in case unforeseen business expenses arise.

A good rule of thumb is to try and stay below a 25% utilization rate. To get your utilization that low, you may have to make multiple payments per month or ask the credit card company to increase your credit limits.

2. Make Payments on Time

Staying organized and paying your bills on time is extremely important when trying to improve your credit score. The later the payment, the bigger the negative effect on your credit score.

A late payment before the 30-day mark may cost you a few more dollars in late fees, but it won’t get reported on your credit score. Once you’re 30 days late, the late payment will show up on your credit report.

Being 30 days late is bad, but not getting current is worse. Getting current and staying current on all payments plays a big role in determining your overall credit score. To stay current on payments, consider setting up automatic payments or text reminders.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

3. Think Twice Before Closing Old Accounts

Are you thinking about canceling an old credit card you never use? You may want to think again. Having a good payment history can help in your credit score, and that old credit card may be serving this purpose. If you close the old card, the payment history will drop off your credit report, and your score may go down as a result. Not only that, but the old card may be adding to your overall credit availability and lowering your credit utilization (see tip #1).

4. Have a Credit Mix

There are many different types of credit you can hold. Some of the most common types are mortgages, credit cards, and auto loans. Other examples include charge cards to retail stores, home equity lines, and recreational loans.

Having a mix of different credit types can be as important as paying your bills on time. The ability to maintain a credit mix and pay on time shows your lender you can manage multiple credit lines, which tells the lender you’re a responsible borrower who knows how to handle credit.

5. Dispute Errors

Errors happen, so it’s critical to check your credit score regularly. If you do find an error on your credit report, report it right away. Credit reporting companies don’t require fees to file a dispute, so correcting the error should cost you nothing (except time).

You can dispute the inaccurate information with either the credit bureau (TransUnion, Experian, Equifax) that issued the report containing mistake or the company that reported the incorrect information to the bureau. If the information is truly inaccurate, you should be able to get it pulled from your credit report and fix any damage to your credit score.

Partner With Team Financial Group and Get Fast, Flexible Financing Today

At Team Financial Group, we offer flexible payment terms tailored to meet your business needs. Even if you have a low credit score, don’t get discouraged — our commercial financing experts are here to help, and we’ve been able to provide financing for businesses with all types of unique circumstances. Our application process is easy and won’t affect your credit score, so apply today to get started.

If you have any questions about the financing application process or which financing option is right for your business, fill out our online contact form or call us at 616-735-2393. We’d love to chat with you about your options.

The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.

Every so often on this blog, we answer frequently asked questions about our most popular financing options so you can get a better understanding of the many solutions available to you and the benefits of each.

This month, we’re focusing on the sale-leaseback, which is a financing option many businesses may be interested in right now considering the current state of the economy.

What Is a Sale-Leaseback?

A sale-leaseback is a unique type of equipment financing. In a sale-leaseback, sometimes called a sale-and-leaseback, you can sell an asset you own to a leasing company or lender and then lease it back from them. This is how sale-leasebacks usually work in commercial real estate, where companies often use them to free up capital that’s tied up in a real estate investment.

In real estate sale-leasebacks, the financing partner usually creates a triple net lease (which is a lease that requires the tenant to pay property expenses) for the company that just sold the property. The financing partner becomes the landlord and collects rent payments from the former property owner, who is now the tenant.

However, equipment sale-leasebacks are more flexible. In an equipment sale-leaseback, you can pledge the asset as collateral and borrow the funds through a $1 buyout lease or equipment finance agreement. Depending on the type of transaction that fits your needs, the resulting lease could be an operating lease or a capital lease.

Although real estate companies frequently use sale-leasebacks, business owners in many other industries may not know about this financing option. However, you can do a sale-leaseback transaction with all sorts of assets, including commercial equipment like construction equipment, farm machinery, manufacturing and storage assets, energy solutions, and more.

Why Would I Want a Sale-Leaseback?

Why would you want to lease a piece of equipment you already own? The main reason is cash flow. When your company needs working capital right away, a sale-leaseback arrangement lets you get both the cash you need to operate and the equipment you need to get work done.

So, let’s say your company doesn’t have a line of credit (LOC), or you need more working capital than your LOC can provide. In that case, you can use a sale-leaseback to raise capital so you can kick off a new product line, buy out a partner, or get ready for the season in a seasonal business, among other reasons.

How Do Equipment Sale-Leasebacks Work?

There are lots of different ways to structure sale-leaseback deals. If you work with an independent financing partner, they should be able to create a solution that’s tailored to your business and helps you achieve your short-term and long-term goals.

After you sell the equipment to your financing partner, you’ll enter into a lease agreement and make payments for a time period (lease term) that you both agree on. At this time, you become the lessee (the party that pays for the use of the asset), and your financing partner becomes the lessor (the party that receives payments).

Sale-leasebacks usually involve fixed lease payments and tend to have longer terms than many other types of financing. Whether the sale-leaseback shows up as a loan on your company’s balance sheet depends on whether the transaction was structured as an operating lease (it won’t show up) or capital lease (it will).

The major difference between a line of credit (LOC) and a sale-leaseback is that an LOC is typically secured by short-term assets, such as accounts receivable and inventory, and the interest rate changes over time. A business will draw on an LOC as needed to support current cash flow needs.

Meanwhile, sale-leasebacks usually involve a fixed term and a fixed rate. So, in a typical sale-leaseback, your company would receive a lump sum of cash at the closing and then pay it back in monthly installments over time.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

How Much Financing Will I Get?

How much cash you receive for the sale of the equipment depends on the equipment, the financial strength of your business, and your financing partner. It’s common for an equipment sale-leaseback to provide between 50–100 percent of the equipment’s auction value in cash, but that figure could change based on a wide range of factors. There’s no one-size-fits-all rule we can provide; the best way to get an idea of how much capital you’ll receive is to contact a financing partner and talk to them about your unique situation.

What Types of Equipment Can I Use to Get a Sale-Leaseback?

Most often, businesses that use sale-leasebacks are companies that have high-cost fixed assets, like property or large and expensive pieces of equipment. That’s why businesses in the real estate industry love sale-leaseback financing: land is the ultimate high-cost fixed asset. However, sale-leasebacks are also used by companies in all sorts of other industries, including construction, transportation, manufacturing, and agriculture.

When you’re trying to decide whether a piece of equipment is a good candidate for a sale-leaseback, think big. Large trucks, valuable pieces of heavy machinery, and titled rolling stock can all work. However, collections of small items probably won’t do, even if they add up to a large amount. For example, your financing partner most likely won’t want to deal with the headache of assessing and potentially selling piles of used office equipment.

Is a Sale-Leaseback Better Than a Loan?

A sale-leaseback could look very similar to a loan if it’s structured as a $1 buyout lease or equipment finance agreement (EFA). Or, if your sale-leaseback is structured as a sale and an operating lease, it could look very different from a loan. Since these are very different products, trying to compare them is like comparing apples and oranges. It’s not a matter of what product is better — it’s about what fits the needs of your business.

With that said, sale-leaseback transactions do have some distinct benefits.

Tax Benefits

With a sale-leaseback, your company may qualify for Section 179 benefits and bonus depreciation, among other potential benefits and deductions. Often, your financing partner will be able to make your sale-leaseback very tax-friendly. Depending on how your sale-leaseback is structured, you may be able to write off all the payments on your taxes.

RELATED: Get These Tax Benefits With Commercial Equipment Financing

Lower Bar to Qualify

Since you’re bringing the equipment to the table, your financing partner doesn’t have to take on as much risk. If you own valuable equipment, then you may be able to qualify for a sale-leaseback even if your business has unfavorable items on its credit report or is a startup business with little to no credit history.

Favorable Terms

Since you’re coming to the transaction with collateral (the equipment) in hand, you may be able to shape the terms of your sale-leaseback agreement. You should be able to work with your financing partner to get payment amounts, financing rates, and lease terms that comfortably meet your needs.

What Are the Restrictions and Requirements for a Sale-Leaseback?

You do need to meet two primary conditions to qualify for a sale-leaseback. Those conditions are:

What Happens After the Lease Term?

A sale-leaseback is usually a long-term lease, so you’ll have time to decide what you want to do when the lease ends. At the end of the sale-leaseback term, you’ll have a few options, which will depend on how the transaction was structured to start. If your sale-leaseback is an operating lease where you gave up ownership of the asset, these are the typical end of term options:

If your sale-leaseback was structured as a capital lease, you may own the equipment free and clear at the end of the lease term, with no further obligations.

It’s up to you and your financing partner to decide between these options based on what makes the most sense for your business at that time. As an additional option, you can have your financing partner structure the sale-leaseback to include an early buyout option. This option will let you repurchase the equipment at an agreed-upon fixed price before your lease term ends.

Contact Team Financial Group to Learn About Your Business Financing Options

Have questions about whether you qualify for equipment sale-leaseback financing or any other type of financing? We’re here to help! Call us today at 616-735-2393 or fill out our contact form to talk with a financing expert from Team Financial Group. And if you’re ready to apply for financing, fill out our quick online application and let us do the rest.

The content provided here is for informational purposes only. For personalized financial advice, please contact our commercial financing experts.

Sometimes, your business needs to acquire equipment that you know will make money in the long run, but short-term cash flow issues make it tough to pay the costs. In these situations, you may decide to finance the equipment and pay it off on a monthly basis, which will prevent cash flow problems, build your business’ credit, and potentially offer tax benefits. Perhaps you start looking at financing options and find a great-looking deal that offers zero annual percentage rate (APR) and zero down payment. Seems like an easy win, right?

Maybe not. There’s nothing inherently wrong with zero APR and zero down financing deals, but many people equate them to “zero cost” financing, which isn’t true. Financing always comes with a cost, but zero APR and zero down solutions are better at hiding it — which isn’t always a good thing.

What Are Zero Down and Zero APR

When you go to buy equipment, you might see a deal from a captive finance company, which is a company that provides financing directly through the equipment seller. For instance, if you buy Honda equipment, you’ll go through Honda Financial Services. If you purchase from Caterpillar, you could finance through Cat Financial.

To get people to use the in-house captive financial company instead of a bank or an independent financing partner, the captive finance company may offer a special promotion: either zero down, zero APR, or both.

RELATED: Understanding Interest: Variable Vs. Fixed Interest Rates for Equipment Financing

The Hidden Costs of Zero Down and Zero APR

On the face of it, zero down and zero APR seem great: you don’t have to pay any money up front, and with no interest for a set period of time, you can pay more toward the principal. However, remember that there are no free lunches in financing. Companies that provide financing have to make money to stay in business, and the way they do that is by charging fees and interest.

Captive financing companies are no different. But because these companies work directly with the equipment manufacturers, they can set purchase prices and otherwise adjust the terms of the transaction so they can make money without charging interest at first. Often, the result is that you feel like you’re paying less for financing, but you really aren’t.

Some of the ways captive finance companies adjust zero down and zero APR deals to make money include:

Finding Financing That Works for Your Business

Keep in mind, we aren’t trying to say that zero down/zero APR deals are always bad options or that the companies who offer them are doing anything wrong. Zero down and zero APR are just marketing strategies that companies use to sell financing, and like most marketing, you need to take it with a grain of salt.

Instead of going right for the zero down and zero APR deals you see advertised, do a bit of extra homework and evaluate all your financing options. Take as much time as you need to read the fine print on a deal. As always, make sure your business credit score stays strong by paying your bills on time, not borrowing more than you can pay back, and not taking out too many credit lines at once.

In the end, you may find you can get better financing terms and pay less overall than you would if you took a zero APR deal. At Team Financial Group, we always explain the full cost of financing up front, and we’ll work with you to customize a financing option and terms that make the most sense for your business. We’re dedicated to helping our clients grow and thrive by providing efficient and flexible financing options and personalized service.

Team Financial Group Offers A Variety of Equipment Financing Options to Fit Your Needs

Ready to get started? Applying is easy! Just visit our application page, fill out tour quick online application, and one of our commercial financing experts will get in touch to handle the rest.

The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.

Purchasing used commercial equipment can deliver significant savings. Used equipment typically costs less up front, and buying used generally won’t prevent you from taking advantage of tax deductions and flexible financing.

But despite all the advantages, buying used equipment comes with risks and potential downsides, too. Follow our checklist for used equipment to make sure you don’t end up wasting money instead of saving it.

The Used Commercial Equipment Checklist

1. Is the Manufacturer of the Equipment Well-Known and Dependable?

Try to buy equipment designed and manufactured by a company with a history of producing reliable products. Major manufacturers offer warranties even for used equipment, and you’ll have an easier time acquiring replacement parts for equipment created by a major manufacturer. If you haven’t heard of the company that manufactured the equipment, you should research them thoroughly to learn about their reputation and history.

2. Is the Seller of the Equipment Reputable?

You can buy used commercial equipment from a variety of sources, including vendors and private parties. (You can also purchase used equipment directly from Team Financial Group.) When looking to buy used equipment from a company or individual you haven’t worked with before, try to find out how long the seller has been selling commercial equipment. If possible, gather information from their past customers. Don’t be afraid to ask for references or testimonials to help vet the seller and establish their reputation.

RELATED: Can I Finance Equipment Acquired in a Private-Party Sale?

3. Does the Owner History Suggest the Equipment Has Been Treated Well?

The buyer and seller history should show how many years the equipment has been in use and how often previous owners used the equipment. The history should also show what type of work previous owners used the equipment for. Make sure to ask for this history and inspect it carefully since some industries and uses may put more wear and tear on equipment than others.

4. Is the Equipment Free of Visible Damage?

It’s always best to see the equipment in person so you can inspect it for common defects and problems. If you don’t have significant experience with the machinery in question, bring someone who does.

You’ll want to look for clear physical damage but take the time to look closer as well. Some less obvious visual signs that might indicate equipment is damaged can include:

5. Does the Machinery Pass a Test Drive?

Even an expert can’t identify all potential issues just by looking over the equipment. If possible, you should take the equipment for a test drive and confirm that the engine starts smoothly. Make sure the machinery runs for at least a few minutes and watch for unusual smoke, smells, shaking, or noises. Also, don’t forget to check for high system temperatures during operation.

6. Does the Condition Match the Seller’s Description?

If the equipment you see doesn’t seem to match the original description provided by the seller, you should back out of the transaction. If you’ve spent a fair amount of time researching the equipment and finding the right seller, you might feel invested in the transaction, but you should never feel pressured to purchase equipment when it doesn’t match up with what was promised. Most likely, if the seller misrepresented the equipment, they aren’t someone you can trust, and they may be hiding other issues with the equipment as well.

7. Are the Age and Condition of the Equipment Appropriate for Your Needs?

If you only use a piece of equipment occasionally, you might be able to go for an older model or an item that’s been used heavily. On the other hand, you or your employees plan to use a piece of equipment frequently or for long intervals, buying an item that’s too heavily used might lead to early replacement, which could cost you more in the long run. Be realistic about your needs and make sure you’re purchasing equipment that makes sense given your long-term usage patterns.

Team Financial Group Provides Financing for Used Commercial Equipment

At Team Financial Group, we finance both new and used equipment whether you’re buying from a company or an individual. We’ll match your needs with the best financing option and help you acquire the equipment you need.

Ready to get started? Fill out our easy online application and get fast, flexible financing today.

The contentprovided here isfor informational purposes only. For financial advice, please contact our commercial financing experts.

A Business Owner’s Dictionary for Commercial Equipment Financing

Want a crash course in commercial equipment financing terms? We’ve got you covered. We’ve put together a dictionary of common equipment financing terms every business owner should know.

If you’re interested in commercial equipment financing and struggling to understand the jargon you find online, keep reading or fill out our easy online application with your questions. Enjoy!


$1 Buyout Lease: Allows you to own equipment while making monthly payments instead of paying the entire cost up front. At the end of the lease, you make a nominal payment (often just a dollar) to end the financing period and permanently transfer ownership.


Accounts Payable: The amount of money your business owes (current liability).

Accounts Receivable: The amount of money your business is owed by others. The unpaid balance is reported as part of the current assets listed on your company’s balance sheet.

Amortized Loan: Requires you to make periodic payments until you have paid off both the principal balance and interest. Early payments typically contain a larger amount of interest payoff, while later payments contain larger payoffs toward the principal balance.

APR: Annual percentage rate. The price you pay to borrow money, quoted as the percentage of the financing amount that you’ll pay each year. Example: If you borrow $100 with an APR of 10%, you would pay $10 per year in financing costs.


Business Credit Score: Indicates the creditworthiness of your business. Credit bureaus rate your business’ credit on a scale of 0 to 100.


Cash Flow Statement: A statement showing all the money entering and leaving your business via income, expenses, and loan payments.

Collateral: Property that a lender accepts as security for financing. The lender gets to keep the collateral if you are unable or unwilling to pay off your debt.


Debt Service Coverage Ratio: (DSC) The amount of cash flow you have available to pay your current debt obligations.

Depreciable Assets: Assets for which you can expense a portion of their cost on your taxes each year that you use them.


Equipment Financing Agreement: (EFA) A non-traditional loan in which you own the equipment and the amount of interest you pay over the life of the loan remains fixed (also called a capital lease).

Equipment Leasing: Rental agreements for the use of equipment. You do not own the equipment, and payments are generally fixed (also called an operating lease).


Fair Market Value Lease: (FMV) Allows you to use the equipment for a set period. Includes several options at the end of your lease term, including purchasing equipment at its current fair market value.

Five Cs of Credit: Describes the five primary factors (character, capacity, capital, collateral, conditions) lenders use to evaluate whether they can approve a financing request from a potential client.

Fixed Interest Rate: An interest rate that remains the same throughout the entire financing term.


Independent Lenders: A lender not affiliated with a financial institution or bank. They can often provide additional financing options, sometimes faster and with more flexibility.

Insolvency: The state of being unable to pay back a debt.

Interest Rate: The percent of a loan’s or lease’s outstanding principal that the lender charges each period for the use of their money or asset.


Lien: A lender’s claim to take possession of collateral property. The lien lasts until you have paid off your debt.

Long-Term Debt: Debt that will take longer than one year to pay off.

Loan-to-Value Ratio: (LTV) The percentage of a piece of equipment’s value that a loan will cover. For commercial equipment financing, this ratio is typically 100%.


Maturity: The final state of a loan, when you have completely paid off both the principal and interest of your loan.


Non-Amortized Loan: A loan with fixed interest and no fixed payment schedule. Instead, you pay off the principal balance in a lump-sum payment.


Principal: The original balance of your loan or lease, excluding interest and fees.

Private-Party Sale: A transaction that involves purchasing from an individual owner (private party) rather than a vendor or dealer.


Refinancing: Taking on a new debt to pay off an old one.

Risk Assessment: The likelihood of you being unable to pay back a debt. Used by lenders to determine whether to accept a financing request and how to set the interest rate.


Section 179 Benefits: A tax incentive that allows you to treat qualifying assets as business expenditures and expense the costs of those assets immediately.

Secured Loan: A loan that requires collateral in case you don’t pay back the debt.

Short-Term Debt: Any debt that you will pay back within a year.

Sole Proprietorship: An unincorporated business with a single owner who pays personal income tax on any profits.

Step Payment Plans: Financing options that allow you to pay back more in the beginning and less each period (step-down) or less in the beginning and more each period (step-up) to account for unique cash flows and needs.


Term: The period of time during which you will make payments on a loan or lease.

Traditional Loan: You borrow money to purchase equipment and make periodic payments that include principal and interest over a fixed term. Once the loan is paid in full, you own the equipment.


Underwriting: The process lenders use to determine the risk associated with offering you financing.

Unsecured Debt: Any debt that’s not backed by collateral.


Variable Interest Rate: An interest rate that varies throughout the term of your financing according to the current market interest rates.


Working Capital: Total revenue minus debt. How much money your business has to work with.

Ready to apply for fast, flexible financing? Start the process now! Just answer a few simple questions and let us take it from there.


The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.



Commercial equipment financing options come in many shapes and sizesso it’s essential to understand the terms of your financing agreement before you sign. One of the most important aspects affects the interest you’ll pay on your lease or loan. While you’ll mostly see fixed interest rates for equipment loansitalso possible to get a variable-rate equipment loan. But what does this mean? And which option is best for your business? 

In this article, we’ll discuss the difference between fixed and variable interest rates and explain why a fixed interest rate is usually the best option for equipment financing. 

Fixed Versus Variable Interest Rates: What’s the Difference? 

Fixed Interest Rates 

A fixed interest rate means you will pay the same percentage of interest each periodThe interest rate is locked in, so no matter what happens to the market or the lenders general interest rates, you will pay that fixed rate for the entire duration of your financing term. 

RELATED4 Tips to Improve Your Business Credit Score (and Why You Need To) 

Variable Interest Rates 

If your loan has a variable interest rate, then the interest rate will move up or down based on changes in the market. Usually, the variable interest rate is tied to an index rate, which is a benchmark rate that’s based on market factors. 

The benefit of variable interest rates is that if the market rates decrease, so will the interest rate on your loan. Of course, the reverse is also true; if market rates go up, so will your interest payments. 

Why Fixed Interest Rates Are Usually Best for Equipment Financing

Most commercial equipment financing options have fixed interest rates, and for good reason. With a fixed interest rate, you can predict exactly how much you’ll be paying each period and how much your financing will cost you over the long run. This knowledge allows you to fine-tune your financials and budgeting to fit your business needs, and it also removes any surprises from the financing process. 

With equipment financing, most business owners know exactly how much money they need. They’re looking to acquire specific type of equipment and use it for a specific length of time. Fixed interest rates line up perfectly with these businesses’ need for financial predictability. When combined with fixed interest rates, equipment loans and leases help businesses of all types achieve accurate budgeting and financial planning. 

In general, it’s best to match the length of the financing term to the useful life of the equipment you’re purchasing. When you combine an appropriate financing term with a fixed interest rate, you set your company up for accurate budgeting based on established best practices. 

Financing options with variable interest rates still have their uses. Many businesses use these lines of credit to finance receivables and inventory on a short-term basis, and your business may want to consider doing the same where it makes sense.  

Team Financial Group Offers A Variety of Equipment Financing Options to Fit Your Needs 

At Team Financial Group, we offer leases and finance agreements that we can customize to fit your unique business needs. We’re dedicated to helping our clients grow and thrive by providing efficient and flexible financing options and personalized service. 

Ready to get started? Applying is easy! Just visit our application page, fill out your contact information, and one of our commercial financing experts will get in touch to help walk you through the application process and determine which option is right for you. 

The content provided here is for informational purposes only and should not be construed as legal advice on any subject. 


Private-party sales can offer a cost-effective way to purchase used commercial equipment. But while the potentially lower cost of the equipment is a significant advantage, there are two possible drawbacks of private-party sales that you need to consider before you buy.

First, there’s a higher risk of complications with a private party than with an established vendor. And second, even when used, commercial equipment can carry a hefty price tag. What if you can’t afford the full price up front? Will you have to turn elsewhere to get the equipment you need?

In this article, we’ll outline a few ways to authenticate and simplify your private party equipment purchase. We’ll also explain how Team Financial Group can provide financing whether you’re looking to purchase equipment through a vendor or a private party.

What Is a Private-Party Sale?

A private-party sale is any transaction in which you purchase from an individual owner rather than a vendor or dealer. Individuals often engage in private-party sales when they buy goods at yard sales or through websites like eBay and Craigslist. However, businesses can also take advantage of private-party sales to purchase commercial equipment.

Private-Party Equipment Sales and Where to Find Them

Private-party sales are a common method for purchasing heavy equipment such as construction vehicles or agricultural machinery. The following are examples of the different options or ways business owners come across equipment that is for sale by a private party:

Private-Party Equipment Purchase Check List

When you purchase used equipment from an individual rather than a verified vendor, you take the risk of getting less (or more) than you bargained for. Use this checklist before you purchase equipment from a private seller to make sure everything is in order.

  1. Ownership: Make sure the equipment is fully paid off and not stolen. Ask for an original invoice, bill of sale, or contact info for the original vendor or dealer.
  2. Bill of sale: If a sale is legitimate, the seller should be able to provide you with a detailed bill of sale that matches the agreed-upon terms.
  3. Liens and loans: Make sure there are no current liens or loans on the equipment. Ask the seller and check your state’s UCC lien search to verify.
  4. Documentation: Purchase the equipment using a check, automated clearing house payment, wire transfer, or another method that provides evidence of the sale.

How to Pay for Equipment Purchased From a Private Seller

Let’s say you found a gently used truck trailer being sold online by a private seller, and everything appears to check out. However, as you’re looking over your finances, you realize that even the great price you’re getting is going to put temporary stress on your company’s cash flow. What should you do?

Fortunately, commercial equipment financing can relieve your cash flow stress. With a financing partner, you get the equipment when you need it, and you get to make convenient monthly payments rather than deal with one massive up-front expense.

RELATED: Business Health: How Equipment Financing Can Help Your Cash Flow

Not all equipment financing companies or banks will provide financing solutions for equipment purchased in a private-party sale, but we do at Team Financial Group. We can provide fast and flexible financing whether your purchase comes through a vendor or a private party.

Team Financial Group Finances New, Used, and Private-Party Sale Equipment

At Team Financial Group, we can provide financing solutions for all your commercial equipment needs. If one of your business contacts is willing to sell you the perfect piece of equipment at a great deal, but your cash flow doesn’t accommodate an outright purchase, we can help!

To get fast, flexible financing today, just fill out our easy online application and let us do the rest.

The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.

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