Use Your Business Assets for Financing Equipment
Heavy equipment can be a major hurdle for many small businesses. Whether you’re pricing out startup costs or looking to expand your business, purchases equipment can often be an unrealistic cost. In order to keep your business growing and your equipment going, leverage your business assets with competitive equipment financing.
Use asset based financing to purchase your machinery. Even a startup small business usually has business assets. By taking out a loan against these assets, you’ll be able to receive a loan that you otherwise might not be approved for. In order to obtain asset based financing, you typically don’t need a high credit score or an extensive business financial history.
If your business doesn’t many assets that you wish to use for financing, consider using your new purchases as collateral. Equipment financing can also use your new purchases as collateral. This allows you to take out a loan with reasonable interest and payment options, but without risking the loss of other important property or business assets. Depending on the structure of the loan, you may need to provide an asset with a higher estimated value than the loan you’ll receive. So the equipment itself may not be enough to secure the loan required to pay for the equipment. This may mean you’ll need to use other business assets for collateral. Some businesses choose to use other pieces of equipment, while others can use inventory or investment real estate as collateral.
Asset based financing is a great way to get approved quickly. Unlike the long application process and credit check of a bank loan, asset based financing can typically become available in a shortened timeline. Whether your business is just getting started and doesn’t have any credit, or you’ve had a few unexpected situations that have left you with a low credit score, asset based financing is typically available for nearly any business.
There are other ways to receive equipment financing. Businesses with particularly good credit scores can take out a traditional loan to purchase new machinery. Other businesses can rely on lines of credit or business credit cards. These options can have higher interest rates and shorter payment plans, but are great options if you are able to repay your loan quickly.
From large machinery to small pieces of equipment, many businesses require a significant amount of assets in order to compete. From expanded growth to critical initial investments, be sure your business has the proper equipment through flexible and competitive financing options.