Natural Disaster Restoration Coming to the Rescue
Hurricanes, floods, and other natural disasters can be devastating to homeowners and businesses in affected areas. Fortunately, natural disaster restoration professionals are available to assist in the cleanup and get residents back on their feet. These modern day heroes and their crews travel into damaged areas, bringing thousands of dollars’ worth of equipment, chemicals, and tools with them to make sure the cleanup is done properly. Coming from across the country, professional restorers take on significant upfront costs, knowing that it will be months before insurance companies are able to pay out claims and reimburse them for their efforts. Ultimately, cash flow is king in these high risk, high reward environments.
If you are a disaster restoration company, doubtless you have experienced some of these expenses and know the struggle of balancing one of the busiest times of the year with the upfront expenses. If you are newer to the industry, here are a few of the things you should plan for and where equipment financing can help.
What to Prepare For
Hotel and Travel Expenses
Moving employees into the area comes with a cost. Hotels are often crowded by those who have been displaced, causing nightly rates to increase. If you do not already live in the area or have not arranged other accommodations, the costs can add up quickly.
Complicated Insurance Processes
Insurance can be one of the most difficult obstacles to navigate for a disaster restoration company, even in the best of times. During large-scale disasters, like hurricanes, insurance companies are inundated with claims. This further slows the claims process.
Collecting Customer Payments
Accounts receivable is the amount of funds that are owed to but have not been collected by, the company. With a slower claim processing time, restoration companies can expect a higher dollar amount of accounts receivable. This is not a bad thing, so long as the company is prepared for a higher than usual upfront cost, with a longer than usual payment period.
High Deductibles and Insufficient Coverage
Insurance can be just as hard on homeowners as it is on restoration companies. High deductibles, insufficient coverage, or learning that the natural disaster is not covered by homeowner’s insurance are all common occurrences. This can cause property owners to put off necessary work, or to default on payments.
Additional Chemicals and Consumables
Severe weather conditions often come with the need for additional chemicals, protective wear, and other single-use products. These costs can add up quickly, so having funds available to accommodate their purchase is necessary. Without liquid cash flow, a restoration company can quickly find itself packing up and going home.
How to Prepare
With high upfront costs and slow payment times, preparation is essential for disaster restoration companies. Fortunately, there are resources available to assist in the preparation and to ensure your company is in the best position possible to participate in large-scale cleanups.
Use Equipment Financing on Large Purchases
Increased operating costs and the need for additional chemicals and disposable products can place a strain on businesses, making it impossible to purchase additional equipment or vehicles during the disaster. Equipment financing companies, like Aztec Financial, provide natural disaster restoration companies with extended term financing options, spreading purchase costs over a longer period of time and providing breathing room while accounts receivables are awaiting payment.
Equipment Credit Lines
“The best time to ask for money is when you don’t need it.” This old proverb is even truer during a natural disaster. Equipment Credit Lines provide restoration companies with faster financing and peace of mind by establishing a relationship with the equipment finance company before funds are needed. When the time to take a draw and buy new equipment arrives, the heavy lifting has already been done.
Homeowner Support Programs
Homeowners who find themselves with high deductibles or without sufficient coverage may be tempted to put off repairs. Fortunately, there are Homeowner Support programs available that can assist your customers by financing repair costs. This means the customer can get necessary repairs done, avoid problems from improper cleanup, and can afford to pay the restoration company.
Courses and Training
Whether it is a course provided by the insurance company, or continued education through a supplier, one of the best ways to prepare for an emergency is to have trained staff that know how to handle the equipment, file the paperwork, and check every box. Properly trained employees speed up the insurance claim process and prevent potential mishaps during the cleanup process.
Not every disaster can be prepared for, and sometimes good intentions never quite make it to completion. On occasion, companies may find themselves in the middle of a disaster without preparations like an Equipment Credit Line or the most up-to-date training. Fortunately, there are options in place to help those who find themselves mid-emergency.
Rapid Response Financing
Rapid Response is a program initiated by Aztec Financial to assist companies involved in natural disaster cleanup. Recently, a Rapid Response was called for during Hurricanes Florence and Michael, providing expedited equipment financing to companies actively involved with hurricane cleanup measures. Those companies received fast, efficient heavy equipment financing so that they could get their equipment and get working.
Extended Credit Terms Through Aztec Financial
Equipment and vehicle invoices purchased within 30 days or less can be transferred to an Aztec Equipment Credit Line, giving the natural disaster restoration company anywhere between 12 and 72 months to pay for the purchase. Many restoration companies turn to store credit during natural disaster cleanup, putting equipment and consumable products on supplier account so that they can get what they need and go. Unfortunately, collecting payments can take longer than 30 days, leaving businesses with an amount owed long past the invoice term’s due date. Aztec Financial has created a solution, partnering with Aramsco to offer extended terms through financing equipment purchases.
Whether you are new to natural disaster restoration or are an old hand at helping people get back on their feet, a little planning and preparation can go a long way. Put your business in the best possible position so that when the next disaster hits, you are ready to jump in and save the day. Prepare your natural disaster restoration business with the help of Aztec Financial. Call us today for more information!