Equipment financing is now available to more than farmers, construction workers, or contractors. In fact, almost every item you use in your business can be classified as a tool, including computers, desks, appliances, and much more. Whether you need a loan to update your machinery or add paraphernalia to your office, the benefits of financing your equipment can help protect your company’s operating expenses. 

Loan Specifics

When looking into loan amounts and how much cash you can get, you may be surprised by the range in the available monies. Loan amounts can vary from $5,000 for office furniture to over $5,000,000 for large construction loans. Terms for the length of financing are also very different than traditional loans. When financing equipment, loan terms may last from one year to as long as five years. Also, depending on the length of time you have been in business and your credit history, interest rates can be much lower than financing through banks or private lenders.

Approval Time

Unlike traditional loans that take up to three months for the loan to be approved and the cash to become available to your business, equipment financing monies can become available as quickly as 24 hours after the paperwork has been filled out. That is because the equipment you purchase is actually written into the loan as the collateral by many lenders. Often investors may require a blanket lien, but they also offer you access to the cash much sooner than traditional lenders. 

Loan Qualification

Your business credit history is still important, but if your company has been around for more than a year and your credit score is over 650, you may have a good chance of getting an equipment loan. Lenders may also check to see if your annual revenue is greater than $50,000 to verify your business is a profitable venture. 

Missed Payments

It is important to note that lenders have the right to seize your equipment if you stop making payments. The terms of most equipment type financing clearly state that the lender has the right to collect the assets if you cannot meet your obligations under the terms of the contract.

Small business owners understand that when it comes to creating a successful company, equipment is essential. So, whether your office needs a new phone system, or your construction site needs a new backhoe, equipment financing loans may be the best option for your company.