Equipment financing provides funding to business owners to purchase new machinery or upgrade existing machinery. This comes handy for both SMEs and large enterprises.
What Is Equipment Financing?
Equipment financing is the loan or lease used to purchase hard assets for the business. There is enormous number of variation in equipment financing that lead to specific types of business and equipments.
This type of financing is used to purchase or borrow physical assets such as restaurant owner or company car.
This loan is taken out with the purpose of purchasing equipment. The loan is secure by the equipment, if you are unable to pay the loan, the equipment gets collected as the collateral.
If you need to trade out equipment frequently or you don’t hve the capital to pay the down payment required for loan, equipment lease is best option for you. Here instead of borrowing money you pay the fee to borrow the equipment.
This type of lease functions like loan alternative and it is used to finance the equipment that you want to own for long term .
This type of lease is similar to rental agreement where you have to return the equipment to the lender at the end of the lease in most cases.
Fair Market Value (FMV) Lease
With this type of lease you make regular payments for a set term while you have borrowed the equipment. At the end of the term you have the option to return the equipment or purchase it at its fair market value.
$1 Buyout Lease
This is the type of the capital lease where you have to pay the cost of the equipment and the interest during the course of lease. In the end you will owe $1 after paying this you will fully own the equipment.
According To The Need You Should Choose Type Of Equipment Financing
If you need the equipment for more than 3 years, purchasing is better option through loan. Equipment loan and lease both offers you the opportunity to own the equipment but loan is less expensive than lease in this case.
Benefits Of Equipment Financing
This is collateral free.
Affordable rate of interests.
Pre approved equipment loan offers.
Flexible loan option.
Some lender offer 100% financing option, and many 90% or less.
Who Is Eligible For Equipment Financing?
Any business that utilizes equipment can use equipment financing; it includes things like vehicles, machinery and computers etc. The individuals from corporate, partnership, proprietorship, private firms, contractors etc. are eligible for this type of financing. Equipment loan is a conservative type of financial product. You will need to have good credit and should be able to service your loan or lease.
Why Equipment Financing?
Equipment financing is generally used when the business don’t have much capital to own the equipment. It can be also used if you need to exchange the existing equipment due to its shorter life span or your business need the latest technology for your equipment.
Types Of Loan That You Can Get By Equipment Financing
Manufacturing Equipment Loan:
This loan Is used by those business who need the equipment for manufacturing gods.
IT And Office Equipment Loan:
This type of loan is used by the office business that need loan to buy or upgrade the IT equipments such as computers, laptops, projectors, servers etc.
Construction Equipment Loan:
This type of loan can be used by the business which are into constructing and this loan will provide them fund that can be used to purchase equipment used in construction.
Medical Equipment Loan:
This type of loan is used by the medical industry which provide them funding for the hospital equipments and clinical stuff.
What Our Clients Say?
Here are few reviews and comments from our clients.
The Financing Compass worked extensively with me to help me anticipate some of the issues that my business may face. Not many lenders would go to that length. They’ve been extremely supportive and a great resource.
Financing Compass enabled me to take advantage of an incredible opportunity to relocate and expand my business, at a pivotal time. The support I received from Financing Compass staff was priceless.
Working with Financing Compass helped me develop my business plan, ideas, and brand before getting started so that I was prepared to open a successful business when I received my loan.
Are You Looking For Our Services?
If you are in need Equipment Financing to start your business you can contact us. We will provide you with the best service that will benefit your business.