For smooth and seamless operations, your business needs the right tools and equipment. The whole path of procuring funds to purchase new equipment can be a bit overwhelming. In simple words, equipment financing refers to loans that are used exclusively for equipment purchase. The term of such loans typically doesn’t exceed 5 years. Financial services like Accord USA equipment financing have worked with small & growing organizations extensively to offer them flexible loans for funding their equipment purchases. Here’s more on the aspects worth knowing.
Getting the loan
Depending on the type of equipment being purchased, you can get up to 100% of the actual cost. The loan your company may take can also include some of the additional costs involved in getting the equipment up and running, including installation, delivery, and relevant taxes. The terms of equipment loans may vary, but in general, the purchase works as a collateral for the loan, which allows a company to borrow what they want, without pledging some of their existing assets. It also offers the choice to get a loan for buying any kind of equipment, which may help a business expand its wings further.
Other factors that matter
If your company is seeking a loan not exceeding $1 million, getting an approval from the lender doesn’t have to be complicated. However, business performance, market standing, current analysis of the market, specifications related to the new equipment, like purchase price and expected resale value, will be considered for approving the loan application. Most lenders approve equipment loan applications within a matter of few business days, so there is no long waiting period as with some of the standard financing options.
Which businesses can consider equipment loans?
Companies that are involved in manufacturing, retail, food & beverage, mining, forestry, distribution, healthcare, technology and other allied sectors can consider the option of equipment loans. The lender may have a few questions before your equipment loan application is processed. We strongly suggest that you check the pros and cons of the concerned lease in detail before you apply for equipment financing. While this is a rather useful and scalable means of financing for small businesses, terms & conditions may vary from one lender to another.
The good news is your company can expect the equipment loan at the earliest, so if you have immediate plans of expansions, or need to buy equipment for seasonal demand, the option is always open.