Small Business Owners (SBOs) sometimes have to move fast to take advantage of opportunity… we know this.
Sometimes, SBOs must move even faster, when they are in the ‘middle’ of an opportunity, meaning that if they are in the middle of operating their daily business, and a vital machine breaks down, the SBO could be in big trouble.
Equipment Financing offers the SBO an option to purchase back-up equipment to stay prepared, or to upgrade equipment to stay competitive, or to purchase more equipment to expand into new territory.
Equipment Financing many times comes with much better rates and terms than other types of business loans and also with less requirements making the financing process faster and less stressful.
Equipment Financing is very similar to getting a mortgage or an auto loan because, like with a mortgage or an auto loan, the equipment that you are financing becomes the collateral.
Also, depending on your credit score, most equipment financing lenders require a down payment equal to 20% percent, and in some instances a little less or or a little more, again, depending on your credit score and other factors.
So long as you make your payments on time then the equipment continues to make your business revenue, but, if you miss a payment or more, the lender may take possession of the financed equipment, just like a house or a car.
Equipment Financing is a Great Resource for Small Business Owners and Here’s Why:
- Keeps Cash On Hand Available: Equipment is expensive, no doubt, and when equipment breaks down, so does revenue, and SBOs need to act fast to replace broken equipment. Equipment Financing can help to keep your business moving forward without a large outlay of cash
- Less Risk to Lenders: The financed equipment becomes ‘collateral’ for the loan and this helps to lessen the risk for lenders which allows room for lower rates and extended terms, so long as the business has a favorable credit score and strong revenues
- Quick Approval Process: Again, depending on the equipment being purchased and the business credit score and revenues, the lender can be fast with approval which helps your business continue with business and generating revenue
- Helps to Build Assets: Once the financed equipment is PAID-IN-FULL and the equipment is maintained, the equipment becomes an asset, or, if enough equity is built up BEFORE the equipment is paid in full, then you may be able to trade in the equipment for an upgrade, in this way, you could keep your equipment updated with new and improved technology
Equipment Financing comes with several benefits and is just another funding option for Small Business Owners to consider, so make sure to research as many funding options as possible.
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