Have you ever had a Repair Order not ship because your finance team didn't pay? Or was overdue?
Of course you have! And now you're stuck. Scrambling for a solution. You need your aircraft material. Your MRO needs their money. Now what?
Yet, it happens every day.
I've been on a number of these calls. I get how stressful it is.
A client of ours was AOG. They demanded us to ship. And rightfully so. AOGs are serious business. We had a repair component that just finished its overhaul and they needed it to be installed within a 7-day time frame. Yet, they had an outstanding account of $150,000, over 60 days past due.
Or when a large distributor holds shipment because you’re a penny over your limit and a day late.
It's a delicate balance. Tension on both ends.
In order to avoid tensions try these easy ways to get better financing and produce better results...
How To Get Better Financing For Your Aircraft Part Repairs
Requesting terms is easy. Just say, I need Net30 and poof, you'll get an unlimited credit line and money will fall from the sky.
Kidding!
But let's assume you filled out a credit application. Now what?
Prepay the first few orders
Wait! Before you kick the screen.
If you're working with a new material partner, prepay a few orders. You'll show you have financial stability. You'll give finance teams peace of mind.
Even if you have terms. Prepay a few every so often. Your supplier's jaw will drop and you'll be on your way to better terms and higher credit limits. That’s negotiating power.
You can say, "Hi Mrs. X, we have Net30 terms with a $200,000 credit limit. Over the past 6 months, we've paid 85% of our invoices on the 30th day and 5% were prepaid. I'd like to request a term increase of Net45 and a limit increase of $250,000 as we have an upcoming maintenance check project. Can you make this happen?"
BOOM.
If it was me, I'd extend the new terms on the spot.
Pay on time
Stay with me! I know this is obvious.
But, you'd be surprised at how often this is not the case. In order to get better financing or more of it, you'll want to pay promptly. Just think, if you're trusted material advisor and partner is not getting paid, is it worth working for you?
Harsh but true.
Make it worth it. Watch your financing rise like a rocket to the moon.
We review how our clients pay and automatically increase their terms and limits.
If you pay on time you'll automatically reap the reward.
Do your struggle with long repair lead times and increased costs?
We want to help. We’ve created a 5 step checklist to help guide you through your next asset repair process.[CLICK HERE TO DOWNLOAD YOUR COPY]
Do more business
Working with a trusted material partner is about the relationship. How they can best support you and how you can continue to put more trust in them.
The more business you do, they more leverage you'll have.
Don't request Net90 with a $100,000 credit limit if you're only going to spend $1,000 a month and pay late.
Pay a little more
You're about to grab the screen and throw it at me.
Pay more you scream? NEVER!
Or let me say...don't be cheap. Often you pay for what you get.
Let say you have 2 options.
OPTION 1:
Price: $10,000
Terms: Prepay
OPTION 2:
Price: $10,500
Terms: Net45
If cash flow and terms are important to you, then option 2 is your best choice. Better terms will not correlate to cheaper prices.
But if you're investing and playing the cashflow game. Invest in the game.
Negotiate the details
If you need a higher credit limit. Say so. If you need better terms, request it.
Don't be silent. Don't jump from vendor to vendor. Invest in the relationship.
Request what you need. Have a discussion. Negotiate the details.
In order to increase your cash flow and take advantage of the best terms possible, it’s important you work closely with your MRO partners.
Whether you're in purchasing, maintenance or finance. It’s a team effort.
Now go get better financing!
Your Wings,
Nate Anglin
CEO
