Finance Manager Stan Ragley has more than two decades of experience in overseeing the financing of Biesse and Intermac machines for America and Canada. He’s seen it all during that time and has a wealth of knowledge to impart to customers, particularly as they are getting closer to a tradeshow or event. With TISE/StonExpo and Coverings just around the corner, Ragley provided his biggest financing tips for prospective buyers.
“The big thing I would tell everyone is to get your ducks in a row now and get things in order so that you’re ready to secure financing,” he said. “That way, you’re able to make a better deal at the show and be ready, especially in an environment like this when machines are in shorter supply because sales are good. The worst time to find out you need to correct something on your credit is when you need it.”
“The point is to be prepared,” Ragley stressed. “Look at both your personal and business credit to ensure it’s all in order ahead of time. Make sure there are no mistakes or things you should correct in advance.”
Ragley preaches the “Five C’s” to customers in an effort to make certain they’re completely prepared and no stone is left unturned:
Capacity: Do you have sufficient cash flow to service the loan?
Character: What is your credit history, both personal and business?
Collateral: Do you have additional collateral at your disposal? This could be inventory, A/R, free and clear equipment or property that you may need to secure the loan.
Capital: What is the net worth of your business and personal net worth?
Conditions: What is the purpose of the loan and what factors should be considered? The economy, new contracts, replacing outdated equipment and employee reduction are all examples of possible factors to examine.
Ragley reminds customers that it doesn’t cost anything to get pre-approved. There are no fees to submit an application or do the credit check required during the pre-approval process. Additionally, there is no obligation to use the approval once it’s secured. While an approval generally expires after 90 days, Ragley noted that his department is able to get it quickly re-approved after that time period has elapsed.
“The best-case scenario is to have the customer go through this process, and show up at a show with a specific dollar figure he’s been approved for already,” he said. “His financing is in order and we know that this customer needs immediate attention at the event.”
Ragley added that little oversights could cause big problems when the time comes to move on a machine. He encounters many customers who, due to the size of their company, don’t have CFOs or accountants monitoring deadlines for simple things like paying an annual LLC fee to ensure the company remains active. He advises those customers to do their due diligence for credit related issues once each calendar year.
“It doesn’t take long and it pays to be ready,” he said.
Biesse is a global leader in the manufacturing of machinery in the wood, stone, glass and metal sectors. Ragley pointed out that the financing requirements remain the same whether a customer is looking to purchase a Biesse or Intermac machine.
“For small business financing, which is basically $5,000-500,000, it’s the same for everybody,” he said. “We have to look at certain things regarding their credit and if they’re not in order, we have to ask questions. The biggest thing any small business can do is have both their business and personal credit in order. Particularly for a show, you don’t want to be waiting until the last minute because it can be a very stressful situation.”
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