Equipment Financing
Equipment financing provides the facility to purchase any equipment in which a company is interested.
How to obtain equipment financing for your company?
Oscar Wilde, a celebrated Irish writer, said: «Anyone who limits himself to living only within his means suffers from a lack of imagination.» That can also be applied to a business. Even when a business appears to be running smoothly, at some point it will stagnate if the owner only uses his own means and not outside financing. A good entrepreneur always has to foresee the next steps to take to make it grow. And this often involves investing in equipment. When you don’t have the money to make such an investment or you just don’t want to strain your finances, equipment financing may be the solution.
What is equipment financing?
Equipment financing provides the facility to purchase any equipment in which a company is interested. The benefits that can be obtained by carrying out an equipment financing process is that the company will increase its assets, increase production for the equipment acquired and generate a credit history for future acquisitions.
Equipment financing works in the same way as vehicle dealerships do, the financing conditions will go according to the equipment that you want to buy, that is, depending on the price of the equipment, the conditions of the same will be elaborated.
The equipment that is available for us to finance will be those whose objective is a work of the company directly (Machinery, Vehicles, Computers etc.)
Who is a good candidate for equipment financing?
Any company that uses any equipment or machinery for the operation of its company in its daily tasks:
- Office technology: internet modem, router, computers or headsets.
- Air compressors, jacks, oil drains and motor hoists for auto repair shops.
- Photocopiers or comb folders for your copy center.
- Commercial grills, ice machines, griddles, or restaurant refrigeration equipment.
- Dump trucks, mini loaders and excavators for your construction business
- Any type of vehicle you need for your business.
- Washers, dryers and ironing machines for laundry companies.
- X-ray machines and dental chairs for dental offices.
- Salon stations, dryers and pedicure chairs for beauty salons.
What is going to influence the interest rate of the team is the credit point of the company and its credit history, remember a good history gives good interests and conditions, bad credit makes it difficult for banks to risk that is why sometimes they see those interests higher than other companies in the same category.
Commercial loans of loans for your business: an excellent option to buy equipment
We are a good option if you want to buy a new or used equipment, we manage and guarantee fast and simple processes for the customer’s comfort and quick acquisition of the equipment in which you are interested. We are more flexible than first-class banks, we take into account the business owner’s personal credit and more than all global cash flows.
Some of the characteristics of our loans are:
Loan amounts range from $ 1,000 to $ 250,000.
The funds can be used for any business purpose, so buying any type of equipment is definitely a possibility.
Duration of the loan between 24 and 60 months: you can thus choose the duration with which you feel most comfortable.
Even if you don't have a credit history, you can request a cash advance to start building a credit history.
The paperwork required is minimal compared to other financial entities or banks.
Advantages and disadvantages of equipment financing:
Advantages:
- Fast process with less paperwork and quick access to funds
- You will not have to pay in advance for the equipment
- As we have seen, you will not be asked for a personal guarantee
- They help you build your credit history
- Interest rates are usually lower than credit cards.
Drawbacks:
Keep in mind that the equipment may be out of date when you pay off the loan in full: the interest you pay over the life of the loan means that you will end up paying more for the equipment than the initial market price.
If you expect to use an equipment loan to buy used equipment, you should keep in mind that the loan amount will cover the appraisal or valuation made on the piece of equipment (not the seller’s asking price, which could be higher).
How does equipment financing work?
In addition to the fact that the equipment works as collateral, equipment loans basically work like other business loans: You pay off the loan in monthly installments that include the principal balance plus interest, over a fixed number of months. These are other of the basic characteristics of equipment financing:
The maximum amount you can borrow equals the total value of the equipment. The way in which this value is calculated will differ due to some determining factors regarding the equipment and the client’s ability to fulfill the obligation.
The interest rate is fixed and this is determined at the time of evaluating the equipment that the client wants to buy his credit score.
The duration of the loan will also depend on the nature of the team and the bank which has made the offer and taking into account the situation of your credit score.
Can be as short as 2 business days. Again, the application process is quick and easy.
What are the requirements to obtain equipment financing?
In order for us to help you with the financing of the equipment you want, we need collaboration with the following:
- Complete our service credit application
- Have last three business statements from your bank account
- Have a license or passport
- Void company check or bank letter
- New or used equipment quote
Equipment financing works in the same way as vehicle dealerships do, the financing conditions will go according to the equipment that you want to buy, that is, depending on the price of the equipment, the conditions of the same will be elaborated.
The equipment that is available for us to finance will be those whose objective is a work of the company directly (Machinery, Vehicles, Computers etc.)
Who provides equipment financing?
There are several options available in the market for obtaining equipment financing. Equipment loans can be obtained from a variety of sources ranging from traditional banks to alternative third-rate banks online.
Traditional lenders, such as Wells Fargo and Bank of America, generally have more stringent requirements, but better interest rates and terms. They may be best suited for established businesses with strong cash flow and assets.
Alternative online lenders are becoming more and more popular as they are more flexible with their requirements than traditional lenders.