The cost of living is at its highest since 1982, with the price of energy and consumer goods increasing due to ramifications from the pandemic, the war in Ukraine and other global events, leading to business owners from every sector feeling the pressure.
During the COVID-19 pandemic the government were able to provide support to struggling businesses through the form of the recovery loan and CBILS schemes, and these lines of support are still available through accredited lenders.
The government has also taken measures to try and prevent forced closures, such as pausing increases to corporation tax, which was set to increase to 25% for limited businesses earlier this year. This has now been shifted to come into effect next year, remaining for now at 19%. Additionally, business energy costs will be capped for the next six months, helping to protect cash flow in the short term.
While these measures and forms of recovery are effective, it helps to be aware of the additional finance options that are available to you as an SME. In this article, our experts explore the way equipment finance and leasing can help to ease finance struggles for businesses during this challenging time.
3 business benefits of equipment finance and leasing during the cost of living crisis
Finance and leasing agreements provide businesses with an opportunity to expand and grow. Furthermore, in the current economic climate, they can also provide much needed financial relief.
Here are 3 reasons why many businesses are turning to equipment finance solutions to help work through the coming recession.
Upgrade equipment and improve efficiencies
New equipment generally results in better efficiency and a better overall service.
As budgets get tighter and your customers are looking to make every penny count, it is imperative that you are providing the absolute best in class service.
This will help to make you the obvious choice for anyone shopping around. Whether you are looking for computer leasing options to improve the speed of your operations, or industry-specific equipment finance solutions, an economic downturn can be the perfect time to invest, as it can help you to stand head and shoulders above your competition as they pause growth plans.
Preserve cash reserves for uncertain times
As we have already mentioned, some businesses, especially fledging SMEs, can struggle when balancing cash flow maintenance with the necessary investments they need to make to help facilitate their growth.
However, there is no denying that there is a certain degree of risk to investing when you are not certain what additional costs or rising prices may be around the corner.
Fortunately, equipment financing and leasing means you can spread the cost of investing and help you to build cash for uncertain times, while still allowing you to access the new equipment you require to thrive.
Fixed repayments and interest rates
Your repayments will be fixed for the entire duration of your lease, meaning that, no matter what happens with inflation in the coming months/years, your repayments will remain consistent, allowing you to budget accordingly with no surprises.
This allows your business to focus on growth over survival; as you know exactly what your outgoings will be every month, you will have a better idea of how much cash will be available to you to invest elsewhere in your business (many experts concur that a recession is a superb time to invest in marketing and advertising, for example).
Questions to ask when opting to finance equipment during the crisis
There are a few things to keep in mind when you are deciding between leasing or buying a new piece of equipment or machinery:
How long are you going to use the equipment for?
If the equipment is going to be used for a relatively short time, or for the duration of a project, then leasing it for an agreed period of time is a fine option, allowing you flexibility without having to commit to an overly expensive investment.
Is the equipment you need highly specialised?
Highly specialised equipment can often be incredibly expensive. As a result, financing it can help avoid the large initial capital expenditure, helping you ensure your cash flow remains healthy throughout economic hardships.
Tailored equipment finance solutions from Shire Leasing
At Shire Leasing, we understand how the current living crisis is affecting the business landscape. Our clients rely on us for our:
- Rapid turnarounds (credit decisions usually within 4 hours)
- High acceptance rates
- Dedicated senior account manager who will deftly handle your account
We provide finance options directly to UK SMEs, designed specifically to provide you access to the funds you require at the exact time you need them. We also work with equipment vendors to offer business customers finance options, making business finance more available at point of sale, whilst alleviating cash-flow for vendors too.
It is a difficult time for every business; allow us to take some of the strain off. For more information on our services, or to discuss bespoke financing options for your requirements, contact our team today.