Key Machinery Financing Tips to Make the Most of Trade Shows

Stan Ragley
August 28, 2018
THE TALK... | Management

Trade shows are a key place for machinery purchasing. For attendees looking to buy, it’s important to get prepared now to secure financing and make a wise purchase. If you’re prepared ahead of time, you’re able to make a better deal at the show and secure what you need in an environment when machines are in shorter supply.

Look at both your personal and business credit to ensure it’s all in order ahead of time. The worst time to find out you need to correct something on your credit is when you need it. Make sure there are no mistakes or things you should correct in advance.

To help you ensure things are in order, remember the Five Cs:

  • Capacity: Do you have sufficient cash flow to service the loan?
  • Character: What is your credit history, both personal and business?
  • Collateral: Do you have additional collateral at your disposal? This could be inventory, A/R, free and clear equipment or property that you may need to secure the loan.
  • Capital: What is the net worth of your business and personal net worth?
  • Conditions: What is the purpose of the loan and what factors should be considered? The economy, new contracts, replacing outdated equipment and employee reduction are all examples of possible factors to examine.

It doesn’t cost anything to get pre-approved. There are no fees to submit an application or do the credit check required during the pre-approval process. Additionally, there is no obligation to use the approval once it’s secured. And, while an approval generally expires after 90 days, some finance departments are able to get it quickly re-approved after that time period has elapsed. Better still, when you’re prepared at a trade show with a specific dollar figure you’re approved for already, you get immediate attention at the event. 

Be aware that small oversights can cause big problems when the time comes to move on a machine. Many customers, due to the size of their company, don’t have CFOs or accountants monitoring deadlines for simple things like paying an annual LLC fee to ensure the company remains active. If you’re in this camp, do your due diligence for credit-related issues once each calendar year. It doesn’t take long and it pays to be ready.

The biggest thing any small business can do is have both their business and personal credit in order. This can be a stressful process, so particularly for a show, you don’t want to be waiting until the last minute to be ready to buy. 

Stan Ragley is finance manager of Biesse North America. He has more than two decades of experience in overseeing the financing of Biesse and Intermac machines for America and Canada.