Everything You Need to Know About Equipment Financing
Running a business means that you will always need the right talent and equipment. Sometimes your equipment will break or be outdated, giving you a limited time to get new units before your talent is put out of work and your profits take a hit. Other times, you will need new equipment to expand your operation or open a new location. With the help of different equipment financing options, like factoring, you can have all the items that you need to stay in business or to grow it.
What Is It?
You can secure financing for your equipment through a number of ways such as bank loans, revolving lines of credit or factoring. Many companies prefer to use factoring for equipment purchases because it is not a loan to be repaid and it has no effect on your credit. Factoring and accounts receivable financing are similar methods to get funds for your equipment and both are easier to secure than most bank loans. By selling your invoices to a factor, you are engaging in a one-time arrangement and can use as many of your good-standing receivables as you need. How
Does It Help?
Equipment financing can be a big help when you are looking to expand your business. Even if you think you have minimal equipment because of your type of business, this financing can help you secure point-of-sale computers or inventory racks as well as deep fryers, welders or patient tables. Depending on the type of financing you go for, it can have minimal effect on your credit, low interest rates and a positive impact on your bottom line. Factoring can also give you a more immediate access to the funds that you need, minimizing the time you have to go without necessary equipment.
Where Do You Get It?
Depending on the type of financing you go with for your equipment, you will need to talk to your bank, your business credit lender or a factoring company. It’s a good idea to research the different lenders, the types of financing they offer and their interest rates before signing any papers. This can help you see which lenders are the most reputable and can even save you from fraud.
Equipment financing can seem intimidating, especially when you are in the middle of expensive repairs or replacements. But, with factoring and other alternative financing options, you can more easily afford the equipment you need when you need it. Some forms of financing will not require a credit check, add to your monthly bills or have an impact on your business credit score.