Flexibility is one of the most important qualities when it comes to business operations and finances. When your company has financial flexibility, it can address challenges and opportunities more confidently than it would with a lack of working capital. And when you have the heavy equipment and other assets necessary to take on a wide variety of work, it's more flexible - and often more successful - than a business with more limited capabilities.
Cat Financial builds flexibility into our financing agreements, providing options for delaying payments when the circumstances call for it. That's especially valuable for businesses that work on a seasonal schedule, whether it's a slow period due to the type of jobs your company takes on or regularly shutting your doors for a few months each year. Let's look at what skip payments are, when they can be used and how they help your business remain in good standing on a financing agreement without creating undue financial stress.
A skip payment agreement is a financing arrangement where payment timing is set to approximate expected cash flows. In simpler terms, your business can build skip payments into a financing agreement, which allow your company to make payments when the business is operating and avoid doing so when it's not active. In general, Cat Financial offers up to three skip payments per year on monthly payment schedules tied to financing agreements.
Your business will eventually have to make the skipped payment, although generally as part of a higher monthly payment as opposed to a double payment after the skip payment period concludes. Instead of having to negotiate with your financing provider each year, you can simply build these mutually agreed upon gaps into your financing arrangement at the start of the partnership.
A skip payment arrangement helps seasonal businesses avoid another long-term budgeting need that complicates financial planning. These issues are already common enough for seasonal companies, and can quickly take time away from other, more pressing issues. Instead of spending additional time focusing on the details of your finances and worrying about making payments while your company isn't operating, you can point your attention toward core business needs.
Skip payment agreements are one of many ways that we actively work to support the businesses we partner with. We place a premium on effective, successful relationships with our clients. That means building flexibility into our financing options and doing everything we can to help clients keep their businesses running smoothly.
To learn more about how skip payments can help your business, get in touch with Cat Financial today!