Can 2020 Be Turned Around?
2020 had a nice ring to it in January but lost its luster before the end of the second quarter. We all know that the Covid-19 pandemic, combined with the remedy of a severe lockdown, was to blame for the economic downturn that resulted in a GDP decline of 9.5%.
As a creditor with a wide array of customers engaged in a variety of businesses, we recognized that some were more adversely affected than others. We answered many calls from lessees who were struggling with cash flow problems but also others who needed additional equipment to manage increased business and remote work environments.
Since we are an Independent Lease Finance Provider that is tangential to the banking industry, we were classified as an essential business. While some employees were remote, a core group staffed the office every day. As a family owned, closely held business, we have more flexibility than other equipment finance companies that do not manage their own portfolio. Therefore, we were able to quickly respond with cash flow solutions and credit decisions on new leases.
For those businesses that survived but lost ground, they are now in recovery mode.Can 2020 be turned around?
According to an article that appeared in a Leasing Industry Publication, there is hope. “Strategies to Preserve Momentum, Reignite Growth during a Downturn” offered some notable “tips”.
- Play Both Offense & Defense
- Invest in Technology
- Innovate, Disrupt, Outmaneuver
In dire circumstances, there is usually a tendency to conserve cash by reducing expenses, but this tactic may cut into the muscle of an organization. It is recommended to balance defense with an offensive strategy to gain new business. This lockdown also provided an opportune time to increase operational efficiencies to offset the cost reductions.
Investment in Technology upgrades can streamline cumbersome and costly processes. The downside is that these acquisitions would depress liquidity. A lease finance program offers a solution that conserves cash while providing 100% of cost as well as protection against obsolescence and possible tax advantages.
Innovate, Disrupt, & Outmaneuver is the last piece of advice. After all, the Author states, “We witnessed the golden age of tech startups during the 2007-2009 financial crisis. “With chaos can come opportunity”, according to the writer. The explanation is that tough economic times filter out bad ideas and poor decision-making paradigms, creating effective leaders in the process.
Whatever your strategy, we hope you find success. Contact us to learn how a lease partner could enable you and your company to “turn 2020 around”.
It is the Lease we can do,
Kevin F. Clune CLFP
Clune & Company
