How to advise your clients to upgrade their assets
As technology rapidly evolves, it’s necessary for companies to maintain up-to-date machinery and equipment or risk losing out to their competitors. Here’s how you can add value to your clients by advising them to upgrade their assets when the time is right.
High equipment costs are always a concern for businesses and their owners, who need to continually improve existing operations in order to stay competitive. That means making sure that business tools, including computers and IT, machinery, commercial vehicles and other essential equipment are current enough to meet the needs of their customers while serving the business efficiently.
While many businesses start off with used or cheaper tools of trade, eventually the time for an upgrade will come. But upgrading tools and equipment can be costly and can put a real dent in cash flow. And when you add the cost of insurance, extended warranties and skills training, new equipment might just feel out of reach for some SMBs.
This is where brokers and dealers can add value and attain additional business by helping existing clients see a way to manage the costs of new equipment through alternative finance arrangements, such as leasing.
Building a case for an upgrade
You can help your clients decide whether or not to upgrade by advising them to look at factors like operational efficiency and market competitiveness. If your clients are using dated IT equipment while most of the market is using cloud technology for example, then they stand to lose out in terms of speed-to-market and profitability.
Australian law requires all business equipment to meet a certain standard, so improved safety is another reason to advise clients to upgrade their assets.
There are many finance options available to businesses that want to invest in new equipment.
Knowing how each one works and differs will help you provide the correct advice to your clients based on their needs.
Finance vs buying: Which is better?
There are many benefits of financing equipment versus an upfront purchase, including:
- Being easier on a business’s cash flow.
- Giving businesses the manageability of fixed, regular repayments.
- Allowing companies to ‘buy out’, ‘give back’ or ‘trade-in’ equipment at the end of the lease term.
- Enabling businesses to build equity in their investment.
- Allowing businesses to claim tax credit inputs and depreciation.
Meanwhile, buying equipment outright gives you immediate legal title to the goods, which is important if you need to sell the equipment in the short term.
Every customer has different needs at different stages of business maturity, so it’s important to offer your clients a customised approach. For more information on how to tailor a finance solution that offers value to your customers, contact your Pepper Money BDM today.