Why does Ringlock not offer accounts to its customers? Ringlock has decided to not provide accounts to its customers, this is a follow on from some of the horror stories of larger construction companies collapsing owing creditors hundreds of thousands of dollars and then those creditors defaulting on their payments. Ringlock has decided it never wants to be caught in this situation. For this reason we operate on a no payment, no goods basis. What this means for our customers is that Ringlock is always in a position of good financial security. We pass that security on to our customers so you can feel safe with depositing your money and knowing that the goods are available and will be received.
Why is a bank overdraft on your business the best option for financing scaffolding?
Using a bank overdraft for financing scaffolding or any business expense can be a viable option, but whether it’s the “best” option depends on various factors. Here are some reasons why a bank overdraft might be considered: (it works similar to revolving credit on a home loan or a credit card as detailed below)
- Flexibility: Bank overdrafts offer flexibility in terms of usage. You can use the funds as and when needed, up to an approved limit. This can be particularly useful for businesses with fluctuating cash flows or those facing irregular expenses, such as the need for scaffolding on a project-by-project basis.
- Quick Access to Funds: Overdrafts provide relatively quick access to funds. Once the overdraft facility is in place, you can draw funds immediately without having to go through a lengthy approval process. This can be advantageous when you need funds on short notice for purchasing or renting scaffolding equipment.
- Interest Only on Amount Used: You typically only pay interest on the amount of the overdraft that you actually use. This can be cost-effective if you only need funds for a short period, such as during the duration of a specific project involving scaffolding.
- Secured or Unsecured Options: Overdrafts can be either secured or unsecured, depending on your business’s financial standing. If you have assets to offer as collateral, it might help secure a larger overdraft limit or more favorable terms.
However, it’s important to consider potential drawbacks and compare them to other financing options:
- Interest Rates: While the flexibility is a benefit, interest rates on overdrafts can be higher than other forms of financing. Comparing interest rates with other options like term loans or lines of credit is crucial. (We have found that the interest rates on overdrafts generally are the cheapest option in terms of interest repayments. Far less then the costs on either a business loan or financing. Please consult with your current bank as to the rates and set-up.)
- Risk of Overreliance: Depending too heavily on overdrafts can lead to a risky situation. Relying on short-term financing for long-term needs may not be sustainable, and constant reliance on overdrafts may indicate underlying financial issues.
- Creditworthiness: Your ability to secure an overdraft and its terms depend on your business’s creditworthiness. If your credit is not strong, you may face higher interest rates or be denied the overdraft altogether.
Before deciding on using a bank overdraft for financing scaffolding or any business expense, it’s advisable to consult with financial professionals and thoroughly evaluate all available financing options to determine what best suits your business’s needs and financial situation.