Small Business Owner’s Guide to Equipment Financing
Whether you run a retail operation, a manufacturing company, are part of the food service industry, or something else, you need equipment. It supports your ability to serve your customers, and may actually play a role in creating the products your customers want to buy. Of course, obtaining that equipment is no small feat, but equipment financing can make things simpler. What should you know about this type of financing?
What Is It All About?
Really, the name says it all here – equipment financing is a specialized means of obtaining the funding necessary to lease, rent or purchase equipment for use within your business. In many instances, it is geared for purchasing the equipment you need outright. Like any other business loan, you will make payments over time on the amount borrowed to purchase your equipment. You will pay on the principle of the loan, as well as interest on the loan.
Buy or Lease?
Would it be better for your company to buy equipment, or would it make more sense to lease it? This is a question that each company will need to answer for itself, as there are many factors that could affect the situation. For instance, will you use the equipment long enough that the loan could be paid off? If not, then leasing might be the better option. Leasing also comes with other benefits. For instance, there is usually not a down payment required, and you are not usually obliged to have collateral the way you do with some forms of loans.
Options for Equipment Financing
You’ll discover a number of options when it comes to the equipment you need to finance. However, they’re not all the same. You should consider things like the loan amount needed, your annual business revenue, length of business history, business credit history and repayment terms of the financing before choosing how to proceed.
Need help purchasing the equipment you need for your business? Contact Growth Lending Group to learn more.