October 28, 2018
Having a business demands your energy, time, and most importantly, money. Once you have started your business, then it is all about how you will run it and you to get the equipment. Equipment financing is where you get to purchase the business equipment which you cannot afford quite yet. With time, your business will make the payments towards the equipment you have borrowed, and once your debt is repaid, you will own the equipment. In certain kinds of equipment financing, the equipment you borrow will serve as collateral, so if you are unable to pay back the amount, the lender will assume its ownership. If you want to know more about what equipment financing is and how it works, navigate here. Here are some of the best equipment finance options for your business right now.
- Equipment Loans
Equipment loans are best for businesses that have just started and need equipment financing to expand their operations. In this situation, the equipment acts as the collateral for the amount of money you have loaned, and it is also possible to get up to 100% financing; although, some lenders require a 20% down payment. The advantage of equipment loans is that these can be funded really quickly and in as little as two days. Because most of the equipment loan providers operate inside the online sphere only, the underwriting is often more streamlined rather than having a physical location. You can fill out an application, upload the necessary documents and can then get the approval decision within a day or less sometimes.
- Small Business Line Of Credit
This option is appropriate for businesses that want to have a fast and flexible equipment funding. A business line of credit is same as a home or personal equity line of credit. The bank provides you with a certain amount of money that you can draw on repeatedly. You can repay business lines of credit over a few months or have terms that can stretch out to years. You can complete the funding inside a couple of days, and if you have a lower credit score, it will not be a hindrance to the approval either. However, you will have to pay more interest.
- Small Business Administration CDC/504 Loans
Compared to the equipment or term loans, CDC (Certified Development Company )/504 loan can offer you more generous loan limits. This Small Business Administration provides the customers with several loan programs that are directed towards the business owners that have just started. You can use the CDC/504 Program to cover the multiple equipment purchases you make.
- Business Credit Card
Business owners who are looking to earn some extra rewards for small equipment purchases, a business credit card is your best option. Among all the financing options, business credit cards normally have the lowest credit limits. When you use a credit card for the equipment, one advantage is that you can earn points or travel miles for your business.
We really hope that the above information was helpful to you!