Finding Success with Equipment Financing
Equipment is often an overlooked expense in a business until it needs to be purchased or replaced. However, it is hard to imagine a successful business without the added benefit of equipment. Even the smallest businesses require some sort of equipment to properly function. Add to that the advances in technology that require equipment and furnish a business with equipment becomes critical to any company’s success. Luckily, there is equipment financing available that will boost the success rate of your business.
There are two pieces of equipment essential for any business, regardless of its size and scope. The first is a computer, preferably one with compatible speed and lots of memory. The second would be a multi-function printer with copying and scanning capabilities. Yet the question many new business owners face is how to afford these two pieces. The answer is simple: a loan that covers your equipment needs.
The best way to find success with equipment financing is to first take inventory of the equipment that your business will need. So create a wish list of equipment based on your business needs. After creating a wish list, price the items, including not only the price of the equipment, but service and maintenance contracts as well.
When financing equipment, the loan can be used for the estimated cost of the equipment and maintenance. Generally, when applying for the loan, the equipment you wish to purchase can be used as collateral, meaning in case of default, the equipment would be owned by the financer. The good news is that at the end of the loan, you own the equipment and would only be responsible for the renewal of any maintenance contracts.
The terms and conditions of the equipment loan vary depending on several factors. The first is the desired loan amount according to your wish list. This is perhaps the most flexible item as you may be able to find alternative pieces of equipment or cut items should your wish list be too expensive. Another factors are how long your business has been established and its revenue stream as well as your personal and business credit scores. Finally, your preferred repayment terms may be taken into account including the length of your loan period.
The value of having reliable equipment cannot be underestimated in today’s technological climate. Success with equipment financing is contingent upon several factors, but is always a viable option for someone who is going into business or looking to upgrade equipment. Business owner should exercise due diligence when looking for equipment.