There are a great many myths and misconceptions surrounding equipment financing, and most of these have been popularized by hearsay, as well as a general misunderstanding about how the process works. Here are some of the most common misconceptions, which you can use as tips to secure the best terms for your own equipment financing.
Down Payments Are Necessary
It is very possible that you can secure equipment financing with no down payment whatsoever, because equipment financing is far different from traditional bank loans.
Collateral Is Required
For the most part, the collateral involved in equipment financing consists of the equipment itself. That means there is no other form of collateral necessary in the transaction, because the lender can simply claim the equipment if you should default on your loan.
The Equipment Is Too Old
Some lenders will be averse to equipment financing when the machinery in question has aged beyond a certain point. However, if you feel that the equipment is adequate to the task, and will be a big asset to your business, just keep searching until you find a lender who will support you.
Massive Documentation Is Needed
In many cases, equipment financing can be approved on the basis of a one-page credit application, and it won’t be necessary to provide tons of bank statements or business documentation in order to be approved.
Taxes Cannot Be Rolled Into the Financing
It is very common to have the tax, title, and license (TTL) included in the cost of equipment financing, so don’t let anyone tell you that it’s not possible. If you find a lender who has faith in your business and its operation, you probably won’t have any trouble having the TTL rolled into your equipment financing contract.
Equipment Financing Is Approved by a Committee
This may be the case with a traditional bank loan, wherein a loan officer might take your loan to a committee so as to spread risk over a larger body of individuals. However, most finance companies are fully capable of approving equipment financing applications within a matter of hours.
Interested in Obtaining Equipment Financing?
If so, we may be able to provide financial assistance. Contact us at Whitefish Funding, so we can discuss with you some options which you may be eligible for in the way of equipment financing.
