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The Benefits Of An Ongoing Financing Relationship

Feb 01, 2018
Posted by: Stearns Bank

Was your last financing experience like “Strangers in the Night?” Or, was it “the beginning of a beautiful friendship?”

A business loan can be a brief transaction, with parties going their separate ways. However, there are great benefits to an ongoing financing relationship with your lender.

Financing Is Easier And Faster

When you have an ongoing financing relationship, the loan application and approval process will be more efficient.

The lender knows your business operations, and likely has retained records from the last round of financing. You already are in the lender’s system as a trusted customer who has made payments on time. This familiarity and experience can result in fast, hassle-free loan approval.

With an efficient financing process, a small business can promptly take advantage of marketplace trends and opportunities.

You may need new equipment to produce a new product line, or additional capacity to meet growing demand. With an established lender relationship, the time from initial loan application to receiving funds can be compressed into hours rather than days.

Conserve Cash And Working Capital

Cash is always high in demand and short on supply. Easy access to financing enables you to conserve cash for everyday expenses and unexpected problems.

Ongoing financing relationships enable a business to conserve cash while investing in capital improvements. The result is a strong balance sheet which leads to healthy growth and stability in up or down markets.

A lender who works with you through several business cycles and rounds of financing develops a deep understanding of your business.

This enables the lender to anticipate problems that could affect your sales or bottom line. Rather than a “one and done” transaction, the lender can provide ongoing support and guidance. Working across many business customers and industries, the lender’s perspective can be valuable.

Custom Solutions That Suit You

Analysis of your business cycles and market trends enables the lender to offer customized financing solutions. These include payment schedules that that provide relief during difficult times or match up better with an uneven revenue stream.

An enduring, long-term relationship with your lender can be a competitive advantage. Especially for industries with shifting consumer preferences, technology and equipment upgrades, and sales growth. A path to fast financing enables the business to respond quickly to these challenges, ahead of the competition.

Tax Benefits And Credit Score

Many small businesses take advantage of the Section 179 tax deduction for new and used commercial equipment purchases. The tax reform bill changed several features of this deduction. You should consult with your accountant to take full advantage of this benefit.

Working with your current lender, you can be confident that commercial equipment financing will be completed on time to meet Section 179 deadlines. Since these decisions often occur late in the year, a fast and efficient loan process is critical. A mistake or delay in financing can cause you to miss year-end targets and forfeit the tax benefit.

Families build good credit by opening accounts and making on-time payment of their mortgage, credit card balances and consumer loans. Accordingly, your business establishes solid credit with a series of successful equipment loans and repayment. Working with the same lender results in an efficient process built on repetition and familiarity.

What Loan Is Right For You?  Specializing in nationwide small business lending, equipment financing and  full-service banking, Stearns Bank can help your business find out what loan  best suits your needs. FIND OUT HOW WE CAN HELP