Are you looking to purchase equipment for your business but don’t have the cash to buy it outright? Having access to updated equipment, or even equipment in the first place is necessary to keep your business running satisfactorily. Whether you’ve got a service or product based business, having old, or damaged equipment is never a good look. Upgrading your main equipment is important. The problem is, it can put an extreme pressure on your overall cash flow. And that is where equipment financing program comes in, you can get your hands on the things you need without suppressing your profits.
What Are Business Equipment Loans?
Whether it is making sure your equipment are working optimally, or that your vehicles are burning gas more efficiently and getting where they want to go without breaking down, upgrading your equipment is essential.
So what is equipment financing? It is financing that’s mainly designed to purchase business equipment. It can be something from new computer systems and software to an industrial dishwasher for a restaurant. If it is a ‘thing’ and it’s for your small business, then you can bet your bottom-line dollar it can be protected through an equipment loan.
Every lender has different terms when it comes to equipment loans for small business but commonly, you will be able to finance around 80% of the whole purchase amount of the equipment you are in need for.
Why You Need Equipment Loans?
Small businesses all the way to large corporations finance their equipment, but what is equipment financing and why do they need it? Not all businesses have large lump sums of cash available to be spending on equipment and even if they did, they will pick out equipment financing a good way to better spread and manage their cash flow. Here are some of the instances when you need to apply for equipment financing;
Maintain Cash Flow
Through equipment financing you can maintain your cash flow and spread your expenses. This way you can manage your working capital so that it can be used in other parts of your small business.
You Own the Equipment
Fully owning the equipment can increase the asset holdings of your small business, rather than leasing. The leasing may be better for businesses that only need a specific piece of equipment for a timeframe.
Get the Best Equipment
Even established businesses may not have sufficient lump sums of cash available to spend on equipment, with equipment loans you can borrow cash to make those major purchases that will take your business further.
Due to the fact that the equipment is for business use only, you have to be able to claim some tax deductions. In case you are making plans on the use of the equipment, you only will be able to claim tax deductions on the work element.
No Collateral Requirement
One more advantage of equipment financing is that there is no collateral requirement besides the equipment itself.
Having predetermined payments will help you to organize accurate budgets and forecasts to better manage your cash flow.
Simple and Quick Funding
The application process for equipment financing is very short and quick, allowing you to get the equipment your business needs immediately.