Keeping Costs Down in a Transportation-Centric World
November 16, 2021
Cost management – or better said, containment – has become a critical cornerstone for all companies in the transportation and logistics field.
As leaders in the equipment finance arena, the Western Alliance Bank team fields a host of questions from clients who are determining the timing and amount of investment they should put towards revitalizing their fleets.
Some of the most common questions include:
What factors determine when we should consider making minor versus significant investments to our fleets?
The answer is rather simple – companies consistently need to be thinking about making investments in their fleets. This doesn’t necessarily mean that immediate investments need to be made, but that thinking about and planning for those investments is critical. Being ready to make significant fleet changes will help companies stay competitive for driver recruitment, minimize maintenance costs, reduce breakdowns and prevent late pick ups and deliveries.
How can we reduce our upfront investment?
Where once lenders – from independent equipment finance companies to large-scale banks – pulled back access to capital, nimble and knowledgeable equipment finance groups have been able to provide both capital and devised creative financing options to help carriers seize opportunities. Options such as leasing or financing allow customers to maintain cash and better manage cashflow expense with revenue. Freeing up resources by conserving cash and the balance sheet allows companies to better plan for unforeseen future challenges. Similarly, other flexible structures exist, including leveraging OEM opportunities that facilitate future trade-ins and subsidizing assets all work to help boost revenue potential.
What role does equipment financing play on my balance sheet?
The balance sheet is a window into not just the profitability of your company, but an eye on where you spend, how much you have to spend and how wisely you’re using resources. An equipment finance team can help companies better manage that balance sheet to improve what investors see. For instance, the team can help a company better leverage owned and paid for equipment Additionally, smart banking relationships can open doors to help companies replace existing debt with equipment financed at better terms, as well as extend existing equipment financing or leases to manage delays in delivery of replacement equipment.
For more information about how Western Alliance Bank’s Equipment Finance Group can answer questions you have about keeping costs down while maximizing profits, connect with Brian Scott, Managing Director or Lance Waller, Vice President: