Financing costs play a significant role in a truck’s lifecycle operating costs. Knowing how to access capital and credit is vital for fleet growth.
In March of this year, Monitor Daily, published an article by Ray Ellingsen, Vice President of Syndication & Operations for AmeriQuest Transportation Services, entitled, “The Direct Route to Capital Access.” In this article, Ellingsen notes that although truck lifecycle operating costs represent 79% of a truck’s total asset cost, the remaining 21% that is comprised of financing costs requires managers and owners to find the best financing options possible.
According to Ellingsen, “Obtaining the most favorable credit/finance terms can be significantly influenced by an often underappreciated aspect of running a business organization – the creation, maintenance and communication of meaningful, illustrative financial and managerial reporting.” In other words, if you want to gain access to credit and capital, you need to have a clear narrative, backed up with good financial reporting that banks, lending institutions, and leasing companies will understand and to which they will react positively.
The article lists the five pieces of information every financial presentation should possess, including quarterly and fiscal year-end information; prior period “like term” comparison; budget comparisons and related-budget variances; financial forecasts one to three years out; and, KPIs.
Read Ellingsen’s full article to discover how the right story can help you find the most direct route to the capital you need to grow your fleet.