Equipment financing is really just a loan for all your business stuff. It’s not only one of the most common loans, but also one of the easiest loans to qualify for.
But it’s for equipment. Like tractors and trucks and mega-servers right?
Sure, it’s for those things. But it can also be used for so much more! Vanna, show ’em what’s behind Door Number Three!
Is it a new car? Please be a new car!
Well, it could be. But it could also be something relatively boring, like a bunch of pencils or staplers or mouse pads.
Those are lame prizes. Also, Vanna White doesn’t open doors…
Shhh. Listen, what people often don’t realize is that the term “equipment” is a huge umbrella that covers just about any items you need for a business, no matter how large or small. Does your business need some new plumbing tools? Or maybe a few cubicles? Or perhaps a crane? All of those things fall into the category of equipment.
Wow. I could use some of those.
Many people could. But keep in mind that equipment financing may not be for everyone.
Some of the downfalls of equipment financing are:
- It can only be used to purchase equipment. Despite equipment covering a lot more than most people realize, the entire loan must be used for equipment only, and cannot be used for things like working capital, accounts receivable, or refinancing a property.
- There will be a UCC filing against the business – this is a claim stating that the lenders own part of your equipment until the loan is paid in full
On the other hand, equipment financing has some excellent perks:
- Equipment financing can help your business generate revenue almost immediately
- It keeps your working capital in your business instead of sunk into equipment
- Equipment financing is excellent for your business credit
Furthermore, equipment financing typically is a more secure loan than most, meaning that lenders are more willing to work with you and fund you. This is why an equipment loan can often be secured with only a 15-minute application – no additional documentation needed. And since there is fierce competition among lenders to fund equipment loans, you can be sure you’ll get the best rates and terms possible.
You sold me. That’s exactly what I want.
Fantastic! Are you going to buy a vowel?
Too much. Too much.