By Sandra VanBuren
Vice President, Sales - Restaurant and Franchise
TimePayment
As foodservice equipment dealers navigate the post-pandemic economic landscape, there’s a growing realization that traditional financing avenues are no longer the sole answer. Today’s most successful businesses are not only seeking innovative solutions for their own financial needs but are also exploring alternative financing options such as asset-based equipment financing, which allows the value of the equipment being acquired to serve as collateral. This enables them to extend more support to their customers.
Providing alternative financing can be transformative for foodservice equipment and supplies dealers, so that they may integrate with and enhance their operations while making dealers more valuable to clients.
Mitigating the Impact of Tightened Bank Restrictions
Traditional bank lending has dried up as interest rates have risen. As of October 2023, small-business loan approval rates at big and small banks stood at just 13 percent and 19.5 percent, respectively, according to the Biz2Credit Small Business Lending Index. The difficulty in securing financing has hobbled dealers and foodservice operators alike.
In this climate, offering alternative financing options becomes a strategic move for dealers to help customers overcome the hurdles posed by stringent bank regulations. Having these choices available throughout the sales process positions dealers as proactive partners who can support their customers with payment options that fit their business needs.
Taking a Customer-Centric Approach
Asset-based equipment financing allows dealers to extend financial support to their customers based on the value of their tangible assets. Doing so speeds up the financing process, provides pricing flexibility without undercutting margins and creates a more inclusive option for customers who might otherwise face challenges with traditional credit-based financing.
Providing Quicker Turnarounds
In foodservice, speed is key. Asset-based financing enables dealers to facilitate quicker turnarounds for customer projects. Whether foodservice operators need to upgrade their machinery or expand their capabilities, this financing model makes dealers the catalyst for their growth, fostering stronger, more collaborative relationships.
Diversifying Financing Options for Customer Flexibility
By diversifying the financing options available to customers, dealers can enhance their value proposition. Along with asset-based financing, dealers can consider equipment leasing and revenue-based financing, each of which allows customers to choose a solution that best aligns with their unique business requirements and cash flow dynamics. The result is that dealers become a source of financial flexibility for customers, furthering their value and making them an indispensable resource.
Building Stronger Relationships
Beyond the transactional aspect, providing alternative financing options creates an opportunity for dealers to build stronger, long-term relationships with their customers. Discussing financing opens a window into their challenges, competitive landscape, and future plans and aspirations. In a business environment where relationships and collaboration play a crucial role, dealers are discovering the transformative potential of offering alternative financing solutions to their customers.
By embracing asset-based equipment financing and other innovative models, dealers can not only meet their own financial needs, but also become financial allies, making it possible for their customers to overcome challenges, seize opportunities and achieve sustained growth. It’s a supportive, customer-centric strategy that can reshape how dealers drive both sales and success.