Free Up Credit Lines
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The purpose of owning or operating a business is to increase its value. The value of a business can be measured in a number of ways. One of those ways is to reduce the cost of capital. One important element that impacts the cost of capital is the firm's leverage which affects the financial risk of the business.
One often overlooked way to lowering financial risk and lowering the cost of capital is the financing of your fleet of vehicles.
In most businesses, the vehicle fleet is not considered the principal business investment; rather the fleet of vehicles is a means by which the business transacts business. Yet, many businesses own and finance their fleet by tapping into their bank line of credit.
One approach to free up financial resources and possibly improve your cost of capital is to lease from a fleet management professional. Since the fleet management company owns the vehicles (this is the main difference between a lease and a loan), no restrictive debt covenants on other company assets are necessary. This allows the business to leave their line of credit open for principal business needs.
Simply stated, leasing provides a low-risk method of financing, which can improve your cost of capital by keeping your line of credit open thus increasing the value of your business.
At Enterprise Fleet Management we believe that we can not only increase the value of your business but we will also allow you to focus your attention on core activities and where your passion lies - and not dealing with the headaches of managing your fleet.
