Equipment Financing 101: Everything You Need to Know About Paying for Equipment
Running any business requires capital of some sort. Small businesses in particular rely on the benefits of obtaining equipment financing to fund a variety of needs their company has. Whether the money is obtained for small amounts or high-ticket items, there are some things to know about the finance process.
Depending on your business, the types of hardware, software and other materials might be covered by a variety of finance measures. Equipment financing can be used for a variety of things such as solar panels, office furniture, appliances, bookkeeping software, forklifts, ovens, compressors, fixtures, conveyer belts, freezers, vehicles and hydraulic lifts.
The range of options available on equipment financing vary greatly. Typically, a $5,000 amount can cover many of the standard needs of your office. However, lenders may be willing to grant as much as $5,000,000 for large ticket purchases. The business’ credit history, annual revenue and credit score influence the amount of money granted and the interest rates received, but they may be as low as 7.5%. Many loans are funded within one day allowing your business to purchase the necessary items almost immediately. The purchased item often acts as the loan’s collateral in case of default. Understand all the terms and conditions of the loan before signing.
Once upon a time, obtaining a loan or a lease from the supplier. Banking institutions are still an option especially if there is already a well-established relationship between them and your business. Some modern limitations to these traditional options include lots of required paperwork, a slow process that’s long, in person application, lack of lender motivation, restricted finance options and low approval rates.
Online lending is often faster than traditional routes to getting financed. Not only can everything be done from the comfort of your office with all the information easily at hand, but the decision making process is often much faster. Large aggregate companies offer a variety of lending options to choose from across different financial institutions. This offers companies an expedited lending option with competitive rates, terms and amounts side by side. Your company benefits from the competition available on these aggregate websites.
At some point, technology upgrades and advances require a business to make purchases. For many small businesses, equipment financing can be the ticket to growing their business, staying current on technology and replacing worn out items. Don’t wait to purchase what your business need, look into available lending options and keep working.