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The immediate and long-term value of captive finance companies
THE IMMEDIATE AND LONG-TERM VALUE
OF CAPTIVE FINANCE COMPANIES
CAPTIVE FINANCING: WHAT IT IS AND HOW YOU BENEFIT, TODAY AND TOMORROW
Using the best equipment possible is crucial to your operation’s success, but in many cases, getting access to that equipment requires financing to fund your efforts. When you need a financial helping hand, it pays to partner with an experienced captive financing company.
What’s that, you ask? It’s a complex term for a simple concept: A captive financing company is one owned by the manufacturer of the products you’re buying. Cat Financial, for example, is owned by Caterpillar and works for Caterpillar customers only.
THE IMMEDIATE ADVANTAGES OF CAPTIVE FINANCING
Maybe you’re considering going to a local bank to get financing for capital equipment, whether in the form of a small-business loan or some sort of cash advance. The offerings of these types of lenders are limited solely to the funding they can provide you, and that’s it. With captive financing, the parent company provides the upfront capital for financing the equipment. That means captive financing companies generally offer more robust solutions, including:
With so many options, captive financing companies give you the flexibility to make the choices that best suit your needs. And because they can offer everything — financing plus extended protection — in one place, the entire process is faster and easier.
THE LONG-TERM VALUE OF CAPTIVE FINANCE
You need durable equipment made for the long haul. Since captive financing companies rely on the resale value of their equipment, they provide customized support for you and your equipment. That creates an environment where financed products depreciate more slowly, ensuring prolonged value.
There’s also an intangible benefit in the form of building a strong relationship with your financial partner. If you go to a bank to obtain funding for buying durable goods, the extent of the relationship is comprised solely of repayment of the loan. Any additional support typically dries up once the bank delivers the capital. Often, this is due to the fact that the bank doesn't understand the nuances of your industry.
Captive financing companies, on the other hand, are much more invested in your success and the long-term functionality of your equipment. They:
Understand the seasonal shifts and industry trends that influence the sales cycle.
Customize packages based on this knowledge.
Provide an ideal solution for equipment financing throughout the year.
Make informed recommendations beyond the financing and leasing aspects.
That means a captive financing company is going to make sure you leave not only with the best product offering, but also with the flexible and sustainable support to succeed in your market. If you run into hard times, suffer an injury or experience a natural disaster, you’re not suddenly going to lose your equipment. Your relationship with your captive financing company can last for the life of your business.
6 Helpful tips when applying for commercial financing
Financing offers a means to overcome certain business hurdles. Consider these six tips when applying for commercial financing.
Both lease and loan options come with their own distinct advantages, but, perhaps most importantly, they both give you access to best-in-class technology along with the ability to optimize your budget.