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Equipment Financing

When you’re in charge of a small business, getting access to the equipment that you need is essential. Without these tools, you, literally, won’t be able to run your organization. But, for many small business owners, it’s not financially viable to purchase this equipment outright. Because of this, it’s common to rely on equipment financing deals. But how do these arrangements work, and what should you look for when evaluating a business equipment loan.

What Is Equipment Financing?

Let’s start by looking at what equipment financing is and why you might want to use it. When you start a new organization, the first thing that you need to do is to purchase business equipment. Equipment financing arrangements will allow you to do this.

In this case, you’ll need to take out a loan to pay for the equipment. When you do this, you’ll often need to make regular repayments, plus interest. Often, the loan will take place over a fixed term. Another key part of these arrangements is that, once you finish off the loan, you’ll own the equipment.

These equipment financing arrangements tend to be one of the most affordable ways for you to pay for equipment. This is because the finance company can use the items that you purchase as a guarantee against the loan. If you fail to make the loan payment, they can repossess the item. In other cases, they might place a lien against the equipment, lifting it once you finish making payments. To fully understand the consequences that you might face if you don’t make regular payments, you will need to review the loan agreement.

 

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Business Equipment Financing Vs Leasing Agreement

When a small business needs to purchase equipment, there are generally two options for them to explore. The type of agreement that will suit you best will often depend on the circumstances that you intend to use the equipment in.

First, they can get a rental agreement. In this case, they’ll need to pay a fee, to use the equipment. Generally, this fee will cover things like transporting the equipment and, in some cases, installing it. However, this can sometimes lead to uncertainty. At the end of the rental term, the business doesn’t own the equipment, and the rental company might take it back. If you need to constantly keep replacing or updating your equipment, you might be better off using a leasing agreement.

The other option is to use equipment financing. As we discussed, when you use this option, you will own the equipment. At the end of the rental term, you’ll be able to keep the item. When compared with paying endless rental charges, this option can often save you money in the long-term. Also, when the equipment is nearing the end of its lifespan, you’ll be able to trade it in or sell it, recouping some of the costs used to purchase it. For this reason, if you intend to use the equipment for a long time, you will often be able to get a better deal by using an equipment financing system.

As we mentioned, there are pros and cons to each approach. To make sure that you find the right option for you, it’s important to consider the way that you intend to use the equipment. For example, do you need to need the equipment to run the business, but can’t afford to pay for it upfront? Another important question to ask is whether you will be able to afford the down payment, which is often associated with equipment financing. You might also want to find out how much your business will be able to afford to pay each month. If you need more help, you might want to talk to an accountant or business advisor, they’ll be able to help you make a more informed decision.

Who Qualifies For Business Equipment Financing?

Many small businesses might be interested in the benefits of a business equipment loan. However, not everyone will qualify for this kind of program. Often, the lenders will be looking for some specific attributes.

First, in this area, it’s often very important for you to have a good personal credit score. This score is calculated based on how well you have paid off debts in the past and how often you are applying for new credit. This will give the lender confidence that you will be able to make the required repayments on-time. In most cases, you want a credit score of above 600. If you don’t know your credit score, you’ll be able to check it for free online. If it’s too low, you can work to improve it over time. Some of the best ways for you to do this include paying your bills on-time. You should also try to avoid accruing too much debt.

It’s also likely that the lending company will want to check the business records. They want some assurances that the business will have enough funds to make the repayments. There are multiple documents that they will want to see. First, they will want to look over your business plan. They will also want to know how long you have been in business. In some cases, lenders might have strict rules about only dealing with people who have been in business for at least two years. Finally, you’ll need to show them business records. This can include things like a profit and loss statement and balance sheet. Lenders use this to get a better indication of the financial health and spending practices of the business.

Often, preparing these documents can be a lot of work. This can be especially difficult if you’re running a small business, as lenders will be interested in both your personal and professional finances. If you need help to gather and to check the accuracy of the documents, you might want to contact an accountant.

How Quickly Can A Business Equipment Financing Loan Be Approved?

Often, small businesses don’t have the luxury of waiting weeks or months for their business equipment funding to be approved. Instead, they need fast cash to get the equipment that they need, so they have the tools they need to run their business properly. The exact time that it will take for you to be approved will often depend on your needs and the lender that you choose. However, in some cases, you might be able to get the funds within two to three days. This is where you will want to contact Drew Cashmere at South Florida Business Funding who is an expert at obtaining fast cash!  Click here to apply.

What Type Of Lending Fees Are Involved With Business Equipment Financing?

When considering any financing agreement, you should make sure to look over the types of fees that you’ll be expected to pay. In this area, the types of charges will vary from lender to lender. It might also depend on how much of a risk you are. The bigger the threat you are deemed to be, the more charges you will be expected to pay. The type of rates that you can achieve might also be impacted by the economic conditions. In a tougher economy, businesses will be more reluctant to lend money to people.

In most cases, you’ll need to make a 20 percent down payment. Also, interest rates tend to be somewhere between eight to 15 percent, depending on your finances. In most cases, the rate will be fixed for the life of the loan. Typically, these loans will last for between several months to over 10 years, depending on your financial situation. You will also need to factor in any other charges that you need to make, such as late payments. To make sure that you are getting a good deal, you should read the agreement thoroughly before you commit. This will ensure that you understand the obligations that you will be agreeing to. 

Where To Get Business Equipment Funding?

There are plenty of funding options for you to explore, to find the fast cash you need to get the equipment. There are dozens of different lending options you can go through. You can choose smaller funding groups or bigger banks. The choice is up to you, but you should make sure to thoroughly investigate any lender before you sign anything. Make sure to look them up online, to check that they have a good reputation. If possible, read some customer reviews, to see the kind of experience that they will provide. When you are comfortable, you can agree to sign up for the business equipment financing deal.

Contact South Florida Funding Group

If you’re the owner of a small business, trying to arrange an equipment funding loan, while running your organization, can be very difficult. For this reason, South Florida Funding Group, an alternative business funding company,  has made the process as pain-free as possible. We offer a simple application process, which will only take a few minutes to fill out. We also make our decisions quickly, so you can get fast cash. If this sounds appealing, you should get in touch with our friendly team to learn more about how we can help you get the business equipment loan you need.   Click HERE to qualify.

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The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327

Email:
drew@southfloridafundinggroup.com 

786-544-2700

DISCLAIMER

 The operator of this website is NOT a lender, does not make offers for loans, and does not broker online loans to lenders or lender partners. Customers who arrive at www.SouthFloridaFundingGroup.com are matched with a lender or a lender partner, who offer business loan products or credit repair services.