Skip payment option
If you would rather not make payments
during the slow seasons, then the skip payment option is right for you. A skip payment option allows contractors to skip up
to three consecutive monthly payments a
year. This may be beneficial for those contractors who prefer to take a few months
off or focus on snow removal in the winter. To utilize this option, a down payment
may be required, and often three payments
must be made prior to any skip period.
This is similar to the seasonal option in
that about the same amount of principal
and interest will be paid at the end of the
year — the difference being that instead of
six months of lower payments, you get
three months of no payments at all.
Leasing
An underutilized option, leasing allows
contactors to take advantage of the residual
value of equipment to reduce monthly payments. Leasing equipment can free up your
cash and increase liquidity. Leasing typically
requires less cash up front and the monthly
payments are generally lower. Other benefits include the efficiency of using new
equipment and keeping employees happy.
Who doesn't enjoy running new mowers?
Not only will your operators appreciate
newer equipment, think of the impact on
your repair costs. Having newer, professional-looking equipment will benefit your
image with your customers as well.
When weighing your finance options,
look for a revolving plan that fits the needs
of your business and will help manage cash
flow. Having a revolving card that your
crews and maintenance employees use to
pick up parts and get equipment serviced
will save you time. Some manufacturers also
offer contractors seasonal programs and
terms. This will enable you to buy goods
such as fertilizer in bulk before your busy
season, and you'll rest easy knowing your
supplies will be there when you need them.
Also, bundle the products you will need
for each piece of equipment and include
them in the note or lease.Your dealer can
help you determine the quantity needed.
Common items such as a bagger, replacement blades, air filters, oil filters, and belts
are included up front. Now your payment
represents your cost to operate the equipment over that time period, and, best of
www.landscapeirrigation.com
all, it rides the equipment finance rate. This
saves trips to the dealership, which means
more uptime.
As you crunch the numbers this winter, hopefully these simple tips can help
your business and equipment go the extra
mile.
LI
Dan Gundacker is a John Deere Financial
product marketing manager who specializes in
serving commercial landscapers.
Landscape and Irrigation 11
