The outbreak of the Coronavirus pandemic has put the world on high alert, and forced governments to take drastic action in order to stem the flow of infections. In an effort to get us back to normal as soon as possible, a number of closures, social distancing methods and closed borders have been implemented. Hopefully it won’t be long before the crisis is over, but now is a good time to consider your equipment financing future while the virus runs its course.
With the economy sliding into a slump, all indications point to a recession of some sort, even though it may not take the same form (or duration) as the ones we tend to go through every 8-10 years. The Canadian government has introduced a kind of stimulus package meant to assist employers with paying wages up to three months, which will no doubt carry us through the worst of the pandemic. Also, banks have slashed interest rates to drastic lows in an attempt to encourage spending.
While very few people will take advantage of this magic bullet in such an uncertain time, it may be prudent for your construction company to take advantage of the situation. If you work in the agricultural sector, Prime Minister Justin Trudeau has announced that foreign workers (a vital cog of the sector) will be allowed into the country despite travel restrictions, provided they abide by a 14 day quarantine. For the most part, the government seems to be stepping up in these trying times.
Since this virus is believed to be in its apex, there’s good reason to believe it will start tapering off in the coming weeks, especially as conditions become hotter and more humid. If your company has weathered the storm well, and has enough capital to keep going, now could be the prime time to negotiate an excellent financing rate for new or replacement equipment. Many industries will be expected to ramp up production once the recovery phase begins, and the market rebounds back to prosperous territory. If you have contemplated financing new equipment, now might be the time to start running the numbers.
In the meantime, your business can do its part by adhering to CDC recommendations regarding limiting the spread of Coronavirus. With many workers coming and going, now’s the time to place strict guidelines on sanitizing equipment, washing of hands and other risk reduction techniques. If your company’s peak season begins in the spring, then chances are you’re handling things well, but don’t rest on the notion that Coronavirus will be gone by then. While all the signals point towards springtime being the taper-off period, the virus could still hang around until the end of the year, even as new cases drop and the number of recovered patients rises.
These are uncertain times, but they’re not permanent. Just as many are currently dipping into the stock market to take advantage of the weak economy, your company may also be able to plan well for the future by considering whether to purchase new equipment via financing. As always, it’s good to speak with your company’s financial adviser, as well as a reputable financing company that is closely watching the market. That’s exactly what we do at Pivotal Capital Corp, and we invite you to give us a call so that we can answer any questions you might have regarding equipment financing in the Coronavirus era.