A Beginner’s Guide To Getting A Quicker Equipment Loan For Your New Business
You’ll need to acquire, upgrade, or replace your business-related equipment sooner or later, whether you’re laying a road or creating software. The price of doing so out of pocket may be exorbitant unless you’re lucky enough to have a lot of cash on hand. You’ll need to seek finance and should not have bad credit equipment loans australia previously if you don’t have the luxury of waiting. When this happens, you might think about taking out an equipment loan.
An equipment loan is a type of secured installment loan that is used to purchase, well, equipment. Although the term “equipment” is used loosely here, it almost always refers to a tangible object used in your business operations. Vehicles, types of machinery, computers, appliances, and furnishings are examples of these items. It usually excludes debt servicing, labor costs, real estate, and structures, among other things.
How to Get a Loan for Equipment
- Consult your bank or credit union for more information.
Even if you only have basic savings and checking accounts, engaging with your local financial institution has the advantage of already having a working connection with you. Because finance is mostly about risk management, being a known quantity to the bank might result in better rates.
- Make use of an online lender.
While many online lenders focus on short-term working capital loans, a sizable number also provide equipment finance, including equipment loans. A select handful even specializes in the financing of equipment.
- Check to see if the vendor provides financing.
Many people and small businesses found it difficult to obtain loans after the financial crisis. While banks may afford to be cautious when it comes to financing, equipment manufacturers cannot.
- Obtain an SBA Loan
The Small Business Administration (SBA) backs loans made by licensed lenders (such as banks), allowing qualified borrowers to get better rates and terms than they would otherwise. Equipment can be purchased using both SBA 7(a) and 504 loans. In most circumstances, the 504 loans is favored for major machinery acquisitions, although the more flexible SBA 7(a) loan is also a viable alternative for purchasing equipment.
- Consider a Lease-to-Own Agreement (LTO) for your equipment (EFA)
Traditional equipment loans aren’t your sole choice if you need equipment quickly. They might not even be your best option, depending on the circumstances. If obtaining a standard equipment loan proves difficult, there are other options.
You should be able to locate financing that matches your needs and circumstances if you are prepared to go outside the box and research some of the options discussed above. Check out some of our top equipment finance businesses to get a head start.