Many businesses would be helped immensely by having modern, efficient equipment which can help their operation run much more smoothly and productively. When it comes to paying for that equipment however, there are some serious considerations you should take into account. First of all, you should decide on whether you want to purchase the equipment outright, or to lease it for 2 to 3 years and then lease a newer model. When it comes to obtaining financing, some of the best options are described below.
Since the equipment itself serves as collateral, you generally won’t have to put up any assets to secure a loan for purchasing equipment. Repayment periods for equipment loans vary between three years and 10 years, and you might have to put as much as 20% down, or you could obtain 100% financing.
These kinds of loans might be secured or unsecured, depending on the amount you intend to borrow. Lenders for term loans tend to have stricter standards for eligibility than do lenders for equipment loans. However, if you do happen to have good credit, you should be able to take advantage of a lower interest rate, so that the amount you have to repay isn’t quite as high as it would have been with an equipment loan.
The Small Business Administration offers a number of loan products that can be very helpful to business owners looking to finance major equipment purchases. It’s possible to obtain as much as $5.5 million from the SBA to purchase whatever equipment you need to get your business up and running and to make it commercially viable.
Line of Credit
Having a business line of credit can be invaluable when you’re trying to purchase equipment. Some lines of credit offer an account limit of up to $1 million, especially if you have good credit and your business has a solid history of profitability. The good thing about using a business line of credit is that as soon as you start repaying the money you’ve borrowed against the account, you’ll have that balance available to you again.
Is Your Company in Need of Equipment Financing?
If so, we may be able to provide you with financial assistance. Contact us at GP Solutions, so we can discuss some options which may be available to you, so you can obtain the equipment you need to help grow your business.