Introduction to Equipment Financing Loans

Real estate companies enjoy levels of success and flexibility other industries cannot offer. But the ability to make their own hours and earn enormous amounts of money comes with a heavy, heavy price. The real estate business depends on the notoriously volatile housing market, which has been known to create a host of cash flow issues for even the most profitable real estate broker agencies and management companies.

A common concern for a start-up or small business owner is where to get funding for an expensive new equipment without incurring exorbitant interest rates. This is where a business equipment leasing and financing proves very useful. The loan will not require you to put up a lot of cash for down payment or submit piles of documents.

As a small business owner, you now have a lot of options to finance an equipment acquisition – not only from traditional loan providers like local banks. You can find a loan that requires only small payments, as if you are only leasing the equipment. The best part is, you will own the brand new equipment outright once the entire balance is paid off.

Getting an Equipment Financing Loan
Having the right equipment is necessary for the growth of your start-up or small business. However, equipment are expensive – whether it is an upgrade or a new equipment. Repairs and maintenance cost a lot of money, and can put a lot of stress on your business cash flow.

The good news is that the rate of approval for business equipment financing with online lenders is high (at around 80%) – the highest among all financing products. This is true even for traditional loan providers like banks such as Bank of America and Wells Fargo.

The loan application is a straightforward process, and the payment options are convenient. It also requires minimal paperwork. In addition, the entire process is fast. You will get the proceeds within a few days, with better interest rates (beginning at 5%), and very low or even no down payment at all. In most cases, the interest is tax deductible.

Who Will Benefit from Equipment Financing?
Business equipment financing is similar to a business term loan. The main difference is that the former is exclusive to the purchase or upgrade of equipment. It offers a lot of advantages including savings. For one, it allows a small business owner to acquire the equipment they need for a very low or no down payment, competitive rates, and convenient repayment terms.

Equipment loan alternative lenders – and even other lenders in general – allow the borrower to use the purchased asset as a collateral. This is how they are protected. This way, they could increase the principal loan amount while at the same time lowering the interest rate. These all help in facilitating a smooth cash flow for your business.

What Is the Maximum Amount for a Business Equipment Loan?
In most cases, you can get as much as 100% of the amount you need to buy or lease the equipment you need. Some providers, however, may require a minimum credit score and down payment for the equipment financing loan.

Because the asset serves as the collateral, you can save money with the lower interest rate unlike other loan options like invoice factoring, unsecured business credit lines, merchant cash advances, and other small business loan types.

The available business equipment loan options today will allow you to borrow as much as $5M. This is ideal for financing a heavy equipment purchase. The interest rate is low, typically 5% and up.

How Does an Equipment Financing Loan Work?
To the uninitiated small business owner, an equipment financing loan works just like other business loans in terms of payment options. The loan will require a fixed periodic payment, usually monthly, to cover the interest and part of the principal until the total amount is paid in full. You will own the equipment at the end of the loan.

You don’t need a very high credit rating to qualify for a loan. All you need is a minimum credit score of 600.

Contact Us Today!
We specialize in facilitating equipment financing applications for small businesses. Get in touch with us today for a free consultation on equipment financing!