How to Add Capacity without Ruining Your Cash Flow

Think of something that could make money for your business: a truck to expand your fleet, a computer to make your staff more efficient, signage to draw more foot traffic, or perhaps a new machine to enhance your output capacity.

You could be more productive if you had that tool working for you. In fact, looking at it in another way, not having that piece of equipment is actually siphoning money away from your business.

Acquiring additional equipment or adding capacity can be a capital-intensive endeavor for SMEs, tying up funds that might otherwise be used for advertising, overhead, or reserves. Moreover, you will not begin to accrue a positive cash flow from the tools acquired until they are paid for – many months or even years down the road.

Often leasing is the right solution for SMEs. Leasing gives you the benefit of having the equipment work for you at a reasonable monthly fee and avoids a large initial capital outlay. Over and above that, the added capacity is contributing to your positive cash flow.

Leasing equipment enables you to start to appreciate the benefit of that equipment almost immediately. The equipment begins to pay for itself as soon as it earns a single dollar over and above the first month’s lease fee. You are essentially cash-flow positive from the very first month.

When you defer acquiring tools/upgrades/expansions, you are relinquishing the capital that they could be generating for your company.