Having access to the right equipment isn’t just about increasing efficiency. Some businesses fully rely on equipment to generate revenue, such as ovens and refrigerators for restaurants or cranes and bulldozers for construction companies. If your business needs expensive equipment but you can’t afford to pay for it upfront, equipment financing might be the answer. Consider whether an investment in equipment is right for your business.

Enjoying the Perks

There are many benefits to this type of financing. First and foremost, you’ll have access to the equipment you need without disrupting your savings or cash flow. Paying for an equipment loan incrementally will be far easier to budget for, and depending on your lender, you may have access to flexible payment options. Establishing a positive relationship with your lender is the best way to help negotiate a good deal. You’ll also get your equipment quickly. After a simple application process, the lender will soon deposit the funds into your desired account.

Securing a Loan

Equipment financing means applying for a loan that’s specifically used to purchase business-related equipment, ranging from heavy machinery to simple software. While you’re paying the loan in monthly installments, the equipment will technically be owned by the lender. At the end of the term, however, ownership of the equipment will transfer over to you. This type of financing differs from conventional loans in that the equipment is used as collateral. If you fail to pay your loan, the lender will repossess the equipment, liquidate it, and use those funds to cover the outstanding balance. No additional collateral is required, making it quite easy to apply for an equipment loan.

Leasing the Equipment

Some lenders offer the option to lease the equipment instead. With an equipment lease, you’ll provide monthly payments to use the equipment over a decided period of time. This is a beneficial option for businesses that require equipment that will become outdated or obsolete in a handful of years. Depending on the resulting cost, it may be a more financially sound option to lease the equipment rather than work to own it. If you need equipment that has versatility or a long shelf-life, consider a loan.

Having the right equipment can help a business stay on track or propel it into success. If you have your eye on a piece of equipment but don’t have the funds readily available to secure it, weigh your options and try applying for financing.