Adaptability is one of the keys to success in the contemporary business world. In fact, the Harvard Business Review has named it the new competitive advantage.[1] Traditionally, successful businesses were the ones that specialized. Doing one thing, and doing it well, could be enough to rise to the top of an industry and capture a large share of the market. In recent years, things have changed. Analysts today have noted that the best companies are the ones that can adapt their offerings quickly.[1]
The stimulus for rapid change is often technology. Companies can access and process more data than ever before. For example, supermarkets identify and respond to trends by looking at data from loyalty cards.[1] The analysis of those numbers informs what products they ship to which stores and when. Other catalysts for change include shifts in government and wider culture. The coronavirus is a great example of that.[2]
The COVID-19 pandemic has presented a unique challenge to small businesses. Instead of looking at changes in sales numbers from day to day or week to week, many entrepreneurs watched their whole market dry up.[2] But by staying flexible, savvy owner-operators have found ways to adapt and stay strong. For example, many restaurants and even tour companies shifted to a delivery model.[2] Instead of customers coming to them, they found a way to go to the customer.[2]
When the whole method of service delivery changes like that, it can create new expenses for a business. A restaurant may need to buy a truck or invest more in take-out packaging. They may need new dispatch-style software, instead of traditional reservation systems. When these kinds of new expenses arise, equipment financing can be a great solution.
Equipment financing is a flexible form of credit that can be tailored to the borrower’s needs.[3] At Alliance Leasing, our Flexible Finance programs include seasonal, 60/90 day deferred, and working capital options.[3] These plans are designed to help businesses weather a variety of fluctuations in the market.[3] Examples of these challenges include reduced income during an “off” season, or acquiring working capital quickly to adapt and grow.[3]
Compared to traditional bank loans, equipment financing offers many advantages.[3] The application process takes less time.[3] No down payment is required.[3] Equipment financing can be used for previously owned equipment, not just new goods.[3] Finally, this kind of lending is fully tax deductible, up to $1 million, under section 179 of the IRS tax code.[4]
References:
[1]https://hbr.org/2011/07/adaptability-the-new-competitive-advantage
[2]https://www.nytimes.com/2020/04/23/business/coronavirus-small-businesses-adapt.html