What Are the Benefits of Equipment Financing and What Options Does Your Business Have?
Your business needs equipment. It’s as simple as that. Every company does. Thanks to equipment financing, getting the capital needed to purchase or lease equipment is relatively simple, even for small businesses. What are the benefits and how can you choose the right type of financing?
Lock in Great Loan Terms
One advantage of financing is that it provides excellent terms for your business. Equipment loans use the piece of equipment itself as collateral, so even small businesses can generally qualify for low-interest rates, long repayment terms, great LTV ratios, and significant funding amounts. What all of this means for your business is that you can get a loan with terms you wouldn’t normally qualify for.
The best part is that most equipment loans have fixed interest rates that are fully amortized. That’s great because it keeps your payments exactly the same from day one until you pay off the loan. If you take advantage of a market with low-interest rates, you get those same terms even if the market rises later on.
Get the Best Equipment for Your Business
Another advantage of equipment financing is that you can keep your business at the cutting edge. For example, dentists and doctors with high-tech diagnostic equipment and treatment systems are more popular with patients. Customers like anything that makes their lives easier and helps them avoid pain or discomfort.
Other businesses can make service more convenient for customers, too, including stores, restaurants, coffee shops, gas stations, and hotels. One way to use equipment leasing or financing is to upgrade your payment systems with a modern point-of-sale terminal that has all the bells and whistles. The more options you give customers for payments — such as mobile payment options — the happier they are.
Get a Valuable Source of Equity for Your Business
Buying equipment is never money wasted. Every payment you make provides equity for your company. When you own equipment, you can use it in the future to obtain other types of financing with great terms. Do you plan on purchasing your own business location one day? Having heavy machinery, diagnostic equipment, or other equipment can help you qualify.
Choose Between Equipment Financing and Leasing
In today’s world, the business with the best equipment stands out. Both equipment loans and leases are valuable for achieving your goals. The right option depends on the size of monthly payments you’re comfortable with, how much money you have for a down payment, and how often you want to upgrade.