What is Equipment Financing?
Similar to money, you may also purchase (or take on lease) any equipment you want to make your business’s operations get going. When an Entrepreneur plans to start their own business, they should think about all of the buildings, land, and equipment they will need to buy in order to start trading.
Other than that, when businesses are at the growth stage they may need additional equipment to increase their output, at that point their management applies for equipment financing. If you own a business and want some equipment, you may take any items on lease such as IT equipment, Motor Vehicle, furniture, or any other thing, or the business may apply for a bank loan in order to purchase those assets. We call it Equipment Financing in the language of business.
While Equipment Financing is a great tool to avail equipment for your business, qualifying for it may not be very smooth. The business must keep in account the gearing of the business. The gearing of a business measures the proportion of total capital raised from long-term loans. If this proportion is very high, say more than 50 percent, the banks may not lend or the equipment financing companies may not finance the additional equipment. Lenders require your business’s credit score to be higher than 650. Secondly, lenders also want your annual revenue to be more than or equal to $120,000. In addition to this, besides the credit score, they also consider the FICO credit score and require that to be 650+. In addition to this if a business wants to increase the chances of obtaining equipment financing service, the following should also be available
A cashflow forecast which shows why the finance is needed and how it will be used
An income statement for the last period, and a forecast forecast one for the next. These should show the chances of the business to make a profit in the future.
Details of existing loans and sources of finance being used.
Small and large businesses usually engage in equipment financing to bring an ease to their account. Equipment financing allows them to have many important equipment that enable their businesses to get going. If the business is capital intensive, it will need to update its equipment in order to stay in line with the advances in technology and so one of the most prominent benefits is that the process of getting the equipment is very fast, If you qualify for it, it will make it easier for such business to remain updated with the latest equipment. Secondly, you can choose whichever vendor you want. Third, you do not need to arrange large finances at the beginning to make purchases of non-current-assets, plus no need to worry about the price at the start. You can choose the equipment you want that you believe is suitable for your business.
Streamlined process with a fully digital application and funding in as little as 24 hours
Purchase the best equipment for your business, regardless of industry
Finance the entire cost of the equipment, without high fees
in the beginning.
Equipment financing may help you in many ways. The first thing is that your business may grow faster than ever before if you get your business equipment using equipment financing. In addition to this, you can also save a lot of money in the beginning. Of course, it is not very easy to afford all the equipment in the beginning of your business. In this case, Equipment Financing comes handy. More importantly, quick availability of equipment can assist businesses to remain competitive, as it may benefit from economies of scale through increased output and higher level of productivity by the new equipment, resulting in lower average cost. Lastly, it also increases your value among customers by letting your business provide the best quality products to your customers. This opens doors for many opportunities for your business.
Purchase any type of equipment to take on more customers and grow your business.
Avoid large, out-of-pocket expenses by preserving your capital, and write off the entire cost on your tax return.
Deliver more value to your customers by upgrading old equipment or adding new equipment.
PineHurst is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date. Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services. We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!