How to Overcome 3 Challenges of Expanding Your Business in Today’s Evolving Economy

It’s been a tough couple of years for many businesses, but we’re seeing an encouraging shift. Many businesses are experiencing rapid growth and increased opportunities. With this exciting economic evolution, there are also new challenges. 

3 Challenges of Expanding Your Business Right Now

One of the challenges of expanding your business right now is the risk of purchasing supplies and equipment from a disreputable company. Not all companies have emerged strong from the past couple of years. Do your research before you buy. 

Here are 3 more challenges our clients are experiencing right now.

1. Financing

Expanding your business requires capital. You probably need to upgrade your equipment or buy new equipment to increase production or to take on new opportunities. Part of this challenge is that the cost of borrowing is rising rapidly. And many suppliers are requiring larger deposits on orders, even if delivery time is several months out. 

2. Severe shipping delays

Long lead times for manufacturing and shipping are common right now. It’s not unusual to wait 6 months or longer for your new equipment to arrive. Ask before you buy so you know what to expect. Be sure to find out if the shipping delay will affect your warranty. Learn about how to minimize the impact on your business. 

3. Importing equipment from overseas

Importing from overseas is tempting sometimes because costs seem lower. But this perception can be deceiving. For example, some of these suppliers require payment in full before shipping your equipment. In this case, if the equipment doesn’t arrive, your options to pursue recourse are limited or non-existent. 

10 Important Considerations When Importing Equipment From Overseas

Here are 10 important considerations when purchasing equipment from overseas:

1. Is the supplier a reputable company?

2. Is a deposit required upon order? If so, how much?

3. Are there foreign exchange costs to consider?

4. Does the cost include GST?

5. Is the item insured if something goes wrong and the equipment is damaged in transit?

6. Is the unit CSA-approved? There are costs associated with CSA approval, and there may be added costs to make the unit compliant. Or it may not be possible to make it compliant. If the equipment is not CSA-approved, your insurance won’t cover it (such as in case of fire or personal injury). 

7. What’s the warranty? How are warranty issues handled from overseas? How accessible are parts? Keep in mind that downtime can be extremely costly. Waiting for warranty issues to be resolved or for replacement parts to be delivered and installed is expensive.

8. Can the equipment be imported into Canada, and if so, what will it cost? You’ll need a good customs broker for this. We recommend Clearsmith International Inc. Ask for Marci and tell her Lease 1 sent you!

9. Does the supplier arrange shipping from the port to your door? If not, you’ll need to make these arrangements. Either way, there will be costs, so find out in advance what they are. 

10. Do you have the space and sufficient power in your facility?

If you purchase equipment from a local distributor or manufacturer, many of these issues are taken care of for you. However, there are times when importing equipment makes sense. We’d be happy to talk with you about this to help you decide what’s right for you. 

How to Expand Your Business When Faced With New Challenges

In addition to its many advantages, lease financing can help offset some of these challenges. For starters, a reputable equipment leasing company will check out the supplier before the equipment is purchased. This gives you the assurance that you’re dealing with a legitimate business. While there are no guarantees, this reduces some of your risk and gives you peace of mind. 

A vast majority of equipment leases use set lease payments for the entire lease term. This protects you from future rate changes. 

An equipment lease can cover soft costs, including shipping, training, installation, extended warranties, etc. If a deposit is required upon order, your equipment lease can be structured so the leasing company pays the deposit up front for you (subject to credit approval). In this case, understand that your lease term begins at the time of the deposit, even if there’s a shipment delay. 

If you decide to purchase used equipment, in most cases, it can be put on a lease-to-own contract. This allows you to take advantage of a good deal. If it’s a private sale, the leasing company will check for liens against the equipment and prove ownership. This mitigates the risk of buying equipment that’s stolen or has claims against it. 

You can still take advantage of lease financing if you’re importing equipment on your own. In most cases, you’ll need to arrange getting the equipment into Canada and getting CSA approval first. Then a sale leaseback reimburses you for the cost of the equipment and the equipment is put onto a lease-to-own contract. However, sometimes this isn’t necessary. Talk to us for details. 

Expand Your Business With Equipment Lease Financing

Equipment leasing companies understand that it’s been a rough couple of years. Don’t be daunted by a poor business year. You may still qualify for equipment lease financing, even if your financials aren’t great. And don’t be deterred by shipping delays or import challenges. 

See also: Need Equipment Financing, But Don’t Think Leasing is an Option? Read This!

We invite you to contact us to discuss your plans and ask us questions about how to expand your business and how equipment financing may help you in the process. Our mission is to help your business thrive.