Inadequate cash can shutter companies. It is, according to a CB Insights study, the second most common reason for startup failure. Businesses that closed down narrated how they weren’t able to raise the funding needed, and without this crucial lifeblood, they had no choice but to close their doors.
These cash flow dips are no stranger to seasonal businesses. During off-seasons, ski resorts, boating companies, hospitality companies, and other seasonal industries have it harder than non-seasonal brands. In some cases, weak cash flow forces them to make concessions that are not good for business and, eventually, lead to closure.
Regents Capital Corporation believes seasonal businesses deserve support during periods of weak cash flow. Through intelligent equipment financing solutions, we support these enterprises, enable financial health, and help lead them to long-term success.
The Unique Challenges of Seasonal Companies
Apart from weak cash flows during the off-season, seasonal businesses also contend with other unique challenges:
Some seasonal businesses close during off-peak months, which means the staff will only work during certain periods of the year. This may not be an attractive prospect to many candidates, who prefer a stable income throughout the year. An off-season company would then have lower chances of attracting promising talent. Recourse is to provide incentives to their workers, but this would further deplete resources.
Some seasonal businesses spend a significant amount of their reserves toward preparation for the peak months. These expenditures include advertising, expanding inventory, recruitment of temporary workers, etc. All these problems could be mitigated by reliable financing solutions — those that enable companies to solve unique challenges without using up all of their cash reserves.
When financing solutions are concerned, equipment financing is one of the most reliable. This involves leasing a piece of equipment or taking out a loan.
In an equipment loan, the business borrows an amount with the express purpose of purchasing equipment. In an equipment lease, the business does not borrow any amount. Instead, it pays a fee to use the equipment, while the leasing company maintains ownership of the equipment.
Both solutions ease the financial burden of a seasonal business. So, the business does not have to use its precious cash reserves for equipment. Equipment financing lets the company direct its cash flow to other important aspects of the business, including:
Instead of paying for equipment, a seasonal business can purchase other inventories needed for maximum profitability come peak season.
Marketing and Advertising
The business has more resources to devote to marketing before the peak months. This translates to more sales and reservations, allowing the company to reach its income potential.
Planning for Unexpected Expenses
Surprise bills are a bane to a booming business. Adequate cash reserves cover unexpected expenses, keeping operations running smoothly.
Equipment Financing Through Regents Capital
With equipment financing, you are better placed to succeed during peak season and stay stable during the off-months. It is a reliable way to sustain your business in the long run.
Regents Capital makes this goal a reality for many seasonal businesses. Through equipment financing, we have helped countless businesses improve their financial health and reach the peak of revenue generation.
Let us fund your business. Talk to our representatives today.