Buying Tools and Equipment with a Merchant Cash Advance

Why is it that only some people are able to take advantage of great deals while others are left wishing for the wherewithal to advance their lives and businesses? It’s true that there are plenty of ways to save money — if your business has the cash on hand to spend when the timing is right. But if it seems that the only time a good deal comes along is precisely when your business is in the weeds, consider using a Merchant Cash Advance to buy the tools or equipment available to those who can close the deal when it’s offered.

Great deals on new and used equipment, be it business tools like software, new computers and/or office equipment, or tools and machinery specific to your business, e.g., lawnmowers for landscapers, dishwashers for restaurants, day-care operators and salons, etc., are available through a variety of sources. Some deals may be had throughout the year, while others are best purchased at the end of a season or at the start of a new product launch. Still other deals are won simply by being in the right place at the right time—with cash in hand. For example, when attending a trade show, make your best business deal on the last day. Come Sunday, the last thing a manufacturer’s rep wants to do is crate up and ship home the equipments he’s been demonstrating all weekend.

If your business can’t afford this latest model, consider picking up last year’s release. If the equipment will enhance and/or improve your business, it’s an investment and a good use of a Merchant Cash Advance.

Buying used (pre-owned) machinery, tools and equipment can save money on expansion costs, increase productivity, business assets and net worth.

Look for nearly new equipment from bankruptcies, repossessions, plant liquidations and over-stocked inventory. Find these deals on the websites of business associations and user-groups specific to your business. While searching and interacting with your business peers, don’t forget to place an ad for Equipment Needed.

In addition, check out auctions, either online or live. Equipment here sells at a fraction of the original price, though be aware that this purchase is “as is.” Still, ask questions, negotiate repairs and have cash on hand to buy right then. Good buying is all about good timing.

Buying straight from the dealer may be another way to use a Merchant Cash Advance to make the best deal. As always, get references for new dealers.

Create a calendar of best times to buy and be prepared with investment cash to shop for appliances and health insurance in the fall. In winter, look for linens (including towels), carpeting and flooring. According to the American Home Furnishing Alliance, new furniture styles hit the showrooms in February, therefore expect to cash in on discounts of 10% to 50% on furniture in January. Also, because the Consumer Electronics Show and Photo Marketing Association conventions are held in mid-winter, which means new camera models arrive at retailers to coincide, why not pick up a deal on last year’s digital camera models?

Come spring, look for winter and cold weather uniforms in order to stock up on supplies of hats, gloves and jackets. Be sure to check in with your business’ promotional products vendor for deals on screen printing and embroidery. These businesses are gearing up for summer but should have time and winter stock to sell at a bargain.

Finally, summer is another good time to buy furniture because the industry releases new models in both February and August. Summer is also a good time to buy office supplies, and, around Labor Day, to pick up summer-weight uniforms.

The way a Merchant Cash Advance works, your business gets the lump sum of capital needed right away. Spend that on whatever auto-related purchase your business needs. Then over time, the obligation is handled through your credit card processor and normal sales activity. (Learn more about how a Merchant Cash Advance works.)

Paying Vendors with a Merchant Cash Advance

Ah, cash flow. The challenge of keeping cash coming in and going out at an even pace has stymied even the best of businesses. Sometimes, the juggling act of meeting payroll, paying vendor bills, and overseeing accounts receivable and collections, all while keeping the operation going, is more pain than pleasure.

One of the most important relationships in business is the one between the business owner and the vendor. Vendors are so important, in fact, that many business owners think of their suppliers as partners. That said, the customer relationship is equally important. Does your business offer discounts to preferred customers? Does it negotiate discounts for early or cash payment? Remember that everyone’s vendor is someone else’s customer. How can you optimize your business’ relationship with vendors to keep discounts and other forms of savings flowing in?

Offer your business vendor the distinction of being your “preferred vendor.” Let them know they can count on repeat business. Give them an idea of the volume they can expect over a year. While you can use a Merchant Cash Advance to get this relationship going, remember that they are best used as an investment tool. Consider using a Merchant Cash Advance to establish the following discounts with your business’ vendors:

Negotiate cash discounts – For some businesses, owners can offer vendors prompt cash payment for a discount. Turn around is fair play, so don’t forget to offer your business customers the same kinds of discounts. Again, a Merchant Cash Advance to cover your business’ bills should only used in an emergency situation. Paying cash is not an emergency, but with discounts, it’s an opportunity to save. Put the savings in a “discount” account and watch it grow.

Negotiate early pay discounts – Offer your business vendor prompt payment in exchange for the discount. Everyone loves to be paid quickly. It eliminates the need to chase down the money that is due. Offer to pay within five to 10 days for a discount.

Be a prepaid or advance payment customer – For many vendors, requiring prepayments is something saved for customers with little or no credit. But why not become a prepaying customer to your business’ most secure vendors…at a discount, of course.

Conventional wisdom has it that companies improve cash flow by sitting on their cash, delaying paying their bills until the last minute, thus allowing that cash to earn interest. However, for companies with the available liquidity, paying bills faster, and taking the discount, but also making advance payments, can improve profitability and cash flow.

Remember, while a Merchant Cash Advance provides working capital that business owners can use to cover sudden expenses, disruptions in services, or to stabilize cash flow during emergencies, the best use for a Merchant Cash Advance is as an investment in your company’s growth.