Is your business model failing you in the current economic climate? Many small and medium-sized businesses are struggling these days to get enough cash flow from standard business models. A primary reason is that these models are not structured to hold wildly moving targets in place. They do not adequately take into account:

or the volatility of the capital markets
o Unprecedented fuel and related transportation costs
or the housing market collapsed
or the current recession and inflation rates

Incorporating the following five strategies when leasing equipment can give you additional leverage to free up cash flow when it’s needed most.

1) Guarantee the best conditions by evaluating the needs of your company

It sounds simple, but forecasting the specific needs of your business is hard enough when times are good. A clear and conservative plan of what you will need and when will give equipment leasing companies a better fundamental understanding of your business and allow you to get better terms. When considering the acquisition of capital, balance what your company needs to function operationally with what it must have to be competitive.

2) Mitigate risk by being honest about your company’s weaknesses

Communicating a firm understanding of your industry to potential lenders is extremely important. Perception is reality in today’s market, and just because your business is seen as being in a challenged industry, you’re likely going to have a hard time getting a loan. Like it or not, banks and financial institutions may have your industry on a watch list, or worse, a restricted list.

For example, if you’re the CEO of a mortgage company or a transportation-intensive business like package delivery, you’ll have a harder time borrowing than you did a year ago.

Be prepared to directly address how your business has been and has not been hampered by market conditions. If you don’t, your lender will. There is nothing you can do about the lender’s perception of what is happening in your industry, but you can assure them that you are very well aware of your company’s position within the industry.

Make sure you come with all the necessary documentation in hand. The cleaner and more transparent the documentation about your business is, the easier it will be for you to obtain financing:

o Get a free copy of your report from Dun & Bradstreet.
o Make sure the business report shows all correct information, including current officers.
o Obtain free copies of credit bureau reports for all shareholders who own more than 25% of the company’s shares.
o Take steps to remove anything negative on your credit reports that shouldn’t be there.
o Address any skeleton in the closet with personal credit or tax liens before approaching any lender.

To risk invoking an overused expression, “You never get a second chance to make a first impression.”

3) Document and demonstrate loss mitigation

If you can show a potential lender a documented plan to reduce risk and prevent loss, and demonstrate how you are successfully executing it, your chances of receiving sufficient financing increase significantly.

You may not be able to control the price of gas, but you can show what your business is doing to mitigate your losses.

4) Gather your team to access untapped ideas

You are the quarterback of your business. Get insights from your team and see what they think about the state of the business and industry. Challenge them with ideas to generate income and reduce costs. Tell them how they can support company initiatives. The more involved your team members are in solving problems, and the more they know how their daily work activity contributes to the success of the company during difficult times, the more likely it is that you have what you need for a positive lending experience.

5) Persist, be positive and proactive, and win

In a world with too much information, it is sometimes difficult to stay positive and optimistic. But CEOs are uniquely rated for their resilience and creative problem solving…in any economic cycle. Winners win and find ways to keep winning. Success is the most rewarding in times as difficult as these.