The True Cost of Equipment Financing
Even though leasing equipment for your business is often a smart financial move, many companies go to great lengths to hide the true cost of equipment financing from their would-be clients. You might think you’re getting a great deal on some construction or office equipment only to find that you are paying far more than you can afford. If you’re not careful, you can end up ruining your credit, being left without any way to provide your company’s service, and ultimately go out of business. This isn’t meant to scare you away from equipment financing; it’s still a great way to save money while ensuring that you have reliable equipment for your business.
You just need to know how to determine the true cost of equipment financing before you enter into any kind of deal.
Don’t Trust Online Equipment Leasing Calculators
There are several calculators online that claim to determine how much it will cost to lease equipment. These can be useful if you want a ballpark estimate of how much you’ll be spending on equipment, but they aren’t always reliable if you want exact numbers. In most cases, they provide you with the lowest possible prices to entice you into entering into a contract. If you’re going to use one of these calculators, use a few of them to get a general idea of the cost of equipment financing and use your own judgment to make a good decision. You should know whether it’s a smart move to spend $800 a month on equipment financing. If your business makes far more than that, it’s probably going to be a sound investment. Otherwise, look elsewhere.
High Rates for Low Credit
If you don’t have great credit, you might be stuck spending a lot of money on interest when financing your equipment. That can be rough, but there is little you can do about it other than shop around for the best deal. Once you do have your equipment, make sure to get the most of it. Use it only for your business operations, and make sure that you can make all of your payments on time. Hopefully, you will be successful enough to make your payments and improve your credit for any future financing arrangements.
Equipment leasing is admittedly difficult to calculate, but there are tools and techniques that can make it easier. For more advice on how you can find the best equipment financing deals, contact the Growth Lending Group today.