If you’re starting a new business or expanding an existing one, you may be going through a threatening time to set things up. It is a complex business when you have to spend a lot of money on more equipment or else the new business will not work. Equipment acquisition is an essential part of starting a business and you have no choice but to purchase new gear and paraphernalia to get started.
First of all, you need to plan the necessary equipment and it is important that you know how to select the products that suit your needs. Once you have determined the equipment you need, you must create a plan for how you should pay for the equipment. If you don’t have the money to spend it, you probably need a commercial equipment finance company.
What is this company that would provide financing for the purchase of your equipment? Basically this is considered a smart thing to do when you don’t have the funds to buy equipment. Or even when you have money, you can use equipment loans to pay for virtually any type of business equipment you need. The amount you can borrow will vary and will depend on the equipment you are purchasing and the condition of the equipment, such as new or used.
You would normally need financing if you need a car loan. If you’ve already tried a car loan, you probably know how the financing system works. The equipment will serve as collateral for the company providing financing for commercial equipment. Interest rates are fixed and can range from 8% to 30%, depending on the term. These companies also offer a fixed duration for the installments, and this gives the borrower ease in repayment by having the same amount of repayment every month.
The length of the loan term will also vary, depending on the nature of the equipment and how long it is expected to be useful. There is variable depreciation of different equipment and this must be considered before terms can be determined. Some types of equipment have terms of 36 or 48 months. However, some terms provide only 12 months for the loan to be repaid.
What type of business equipment can qualify for equipment loans? All kinds of equipment would be viable for this, such as: computer equipment and computers, heavy machinery, medical equipment, scientific equipment, and commercial vehicles.
So, you can get a loan for trucks, prime movers, tractors, tank trucks, laptops, desktops, servers, factory automation, robotic assembly devices, and many more. The list is long and you have to speak with the representative of the company to determine if the equipment you need can be financed.
They may advise you to lease your equipment, not a loan. However, with a lease, you are only renting the equipment and it will not be yours after the end of the lease term. With a loan, you own the equipment once it is paid in full.