Things You Must Know About Equipment Financing
If you’re starting a new venture or expanding an existing one, there’s a big possibility that you’re going through menacing time just to set things up. It is pretty complex when you ought to spend big sum of money for more equipment or else, your new business isn’t going to run. Equipment procurement is a vital part when setting up a business and you don’t have much choice but to get new paraphernalia and gears to get started.
First things first, it is essential to have a plan for the equipment needed and you have to know how to select products that address your needs. Your next move is to make a plan on how you must pay for it after determining what equipment it is you need. You’ll need to look for a business equipment financing company if you don’t have the cash to spend for such.
You might be wondering on how this kind of company helps you to buy the equipment you need for your business. Whether you believe it or not, this is considered as one of the smartest things you may do particularly when running short of budget to buy equipment. The amount that can be borrowed varies and it depends on the equipment that you’re procuring as well as the state of equipment whether it is used or new.
Normally, you’d need financing if you need house loans or car loans. If you’ve tried any of these two, then you certainly know how the system works. The equipment serves as collateral to the business equipment financing. For the interest rate, it’s fixed and ranging from 8 to 30 percent depending on the term. These companies provide fixed length for the terms and make it a lot easier for borrowers by providing the same amount of amortization each month.
The duration of loan term vary as well, which depend on the nature of equipment and to how long it’s expected to be functional. There’s a varying depreciation of equipment and this will be considered before determining the terms for the financing. Some kinds of equipment come with 36 or 48 months term but there are others that provide 12 months to repay the loan.
If you may ask, what are the business equipment that could qualify for equipment financing? In reality, almost any equipment is viable for this such as IT equipment and computers, medical equipment, heavy machinery, commercial vehicles and scientific equipment. With that said, it is possible to get loans for any equipment you need from trucks, tractors, prime-movers, desktops, laptops, servers, factory automation and a lot more.