As a business owner, your main goal will be to ensure your business is a success. There are a few things to consider when getting your business to where you’d like it to be, for example, if you’re hoping to grow, you will need to look at ways to fund training new staff or moving into new premises. If you need to buy more up-to-date equipment and don’t know how to get the funds, that is where equipment finance comes in. We’ll discuss below what you need to know about equipment finance and how it can be beneficial to your business.
What is equipment finance?
Just like personal loans such as a no credit check loan or a short-term loan can help you in unforeseen circumstances, equipment financeis a way for businesses to obtain more modern, up-to-date pieces of equipment or machinery that can help to make their business run more effectively, without access to a large amount of cash. Often, equipment is expensive and can be unaffordable for new and even established businesses. Opting to finance equipment comes with two options, leasing or a loan to purchase the equipment. We’ll explore both options in more detail below.
Which sectors can benefit?
Equipment loans may be the best option for you depending on the sector your business falls under. A few examples of sectors that may look to finance equipment are agricultural services. Farms need tractors, harvesters, and more heavy-duty tools to help them operate effectively. Businesses in the construction sector may benefit from financing to enhance production and ensure high-quality results. Health care services that deal with highly technical equipment could take out an equipment loan if they find themselves needing to replace technology quickly so that they can do their job accurately.
Purchasing with a loan
As mentioned above, there are two options when it comes to equipment financing. The first is purchasing with a loan. This means that the business takes out a loan so that it can buy a piece of equipment and pay the loan back in more affordable chunks. Because you’re purchasing a product with the money that you are borrowing, the lender can use the equipment as collateral if you cannot repay the loan.Terms of agreements can differ, and it is important that businesses research whether they can make the repayments. One of the major benefits of purchasing equipment with a loan is that your business is left with an asset when the loan is paid off.
Leasing
The second option when it comes to obtaining equipment for your business is leasing. Leasing a piece of equipment means that you aren’t buying it and there for edoesn’t require a large deposit or mean a large amount of interest. Leasing equipment is a good option for businesses that struggle to qualify for loans and means that you can update equipment as time passes. You don’t have to worry about your equipment losing value as you can hand it back and choose a more updated version in the future. Sometimes, you even have the option to purchase the equipment at the end of the leasing term.