The Strategic Role of TRAC Leases
In the face of economic uncertainties, industries find themselves at a pivotal point where traditional bank financing may not suffice. With margins squeezed, equipment costs soaring, and banks tightening their lending terms, businesses are seeking alternative financing options. TRAC leases are a strategic alternative to traditional financing by offering flexible payment terms, cash preservation, and increased liquidity.
President, Brian Eschmann states, “by utilizing TRAC leases for titled assets, businesses can upgrade or add new equipment while preserving their cash through less money due upfront and lower monthly payments.”
The benefits of TRAC leases, or any equipment finance structure, is increasingly evident as banks grapple with their own liquidity challenges and are less inclined to extend credit, making it harder for companies to invest in new equipment. Equipment financing through non-bank lenders can be a critical complement to existing bank relationships.
Strategic Advantages
TRAC leases for titled assets can be a lifeline for companies seeking to maintain liquidity while navigating periods of greater economic uncertainty.
In a recent article in the MonitorDaily, the CFO of a large Midwest-based refrigerated carrier highlighted the critical role TRAC leases play in navigating these economic hurdles:
“With interest rates soaring and equipment costs remaining elevated, TRAC leases have become a critical financial tool for us. These leases allow us to manage our cash flow more effectively, as they offer lower monthly payments compared to traditional loans. In an environment where margins are compressed and banks are more conservative in extending capital, TRAC leases provide the flexibility we need to maintain and hedge the impact of higher capital costs. This arrangement also helps us mitigate the financial risk associated with fluctuating asset values, ensuring that we can adapt to market changes more efficiently.”
Northland Capital’s TRAC lease options offer a compelling solution. Northland Capital understands the unique challenges currently facing businesses and provides tailored TRAC lease arrangements that cater to specific needs. Companies can confidently invest in new equipment, preserve working capital, and mitigate financial risks, helping to ensure their continued growth and success.