It seems every decision a business owner makes has financial implications. Should we expand our fleet? How? Should we save up cash in a mattress? Buy, finance and depreciate? Lease? Well, The Driller can’t answer these questions for contractors. That’s all between them and their bankers, CPAs and bookkeepers. But, we spoke to Mac Nehring of Civista Leasing & Finance to get readers a few financing trends and ideas to think about if they have “expand our fleet” on their to-do list.

Q. Give readers three headlines here. What should people be concerned about going into 2024 if they’re looking to expand their fleet and need financing?

A. Probably the biggest headline, which will surprise no one, is changes, right? Everything’s changing. Costs are changing. Prices are very volatile on equipment. Things that used to cost $150 grand a couple months ago now cost $200 grand. You know, changes like that. I don’t think it’s a surprise to anyone that the rates are pretty volatile as well. They’re moving up and down pretty quickly from week to week, month to month. So I think my number one headline would be, there’s a lot of change. No one has a crystal ball of what’s coming.

I’ve been counseling a lot of my customers, do your reading, do your research, but take everything with a grain of salt. If someone tells you, “Oh, rates are rates are going to drop sometime next year,” yeah, maybe. Maybe they’re not. Again, if there’s one thing we’ve learned over the last couple years, it’s we’re not really sure — right? — where things are going. We all have theories. We all have different experts we look to and see what they think, but the truth of the matter is no one is really sure. No one has a crystal ball. So that would be kind of one of the big headlines.

Probably the second thing I would say is it’s important right now to not do what you’ve always done just because you’ve always done it. We’re kind of in a time where you really need intentionality. Does that mean I’m going to start paying for more things with cash? Does that mean I’m going to start financing more things? What things am I financing? What things am I not? Those decisions need to be very conscious and very planned going forward. The days of just freewheeling and just in the moment kind of making a gut decision, I think in today’s environment that’s not wise. I think you need to have a more long-term plan and really think about these things.

Okay, so we’ve got change and we’ve got … shake things up a little bit personally, like how are you doing things? How can you do things better going into 2024?

Q. Yeah, so that’s two. What’s your third headline for contractors going into 2024?

The third, I would say I am highly encouraging everyone I talk to get with their CPA, get with their tax advisors now more than ever. You need to really understand how financing may affect your taxes at the end of the year. I think for a lot of companies, margins are tighter. Obviously, it’s an election year coming up. It’s very important. I’ve been encouraging everyone I talk to get with your tax team, your CPA, your accountant, and really talk about, “Hey, here’s my plan going forward. I need to acquire these things. Should I be financing them? Should I be paying cash? And if I do finance, how will that affect my taxes going forward? What benefits can I see by financing, whether that’s a loan or a lease? How can I put my company in a good position to reap a lot of benefits on the taxation side of things?” Which, again, relates to my previous point of, don’t always just do what you’ve done. Really be intentional.

So the three things, I’ll sum it up for you. The three things I would say are, [one] expect change. Everything’s different. Everything’s changing. Two, is be very intentional going forward and plan. And then three is, really focus, get with your team about how this can affect your taxes. That would be really the three things I’m talking most about with people.