5 Facts About Heavy Equipment Financing

Obtaining heavy equipment for your business is a noble choice, but it can get expensive! Thanks to heavy equipment financing, you’ll be able to finance your business’s needs while being nice to you balance sheet. However, before signing on the dotted line, there are some facts that you should know. Here they are:

Consider Used Equipment Versus New Equipment

Most business owners are unaware that they have the option of choosing between leasing new or used heavy equipment. One of the most important aspects to consider is the lifespan of the equipment. As I’m sure you know, the older equipment gets, the more money it could require to maintain.

Subsequently, older equipment can be more difficult to get approved for financing. This is because used equipment is more prone to mechanical failure than its new counterparts. On the other hand, while new equipment is known to be more reliable, it usually costs more. Be sure to weigh all of your options before committing to a decision.

Securing a Loan With Bad Credit

There are a number of available options when it comes to searching for heavy equipment financing. However, to secure a loan, it’s beneficial to have attractive business credit. If you’re looking for a business loan but have bad credit, that doesn’t mean you won’t be considered. Just make sure to evaluate overall cost, terms and interest rate.

Which is Better for Your Business: Buying or Leasing? Let Us Show You!

Research the Difference Between Leasing and Financing

Equipment leasing is an excellent option for businesses that do not have the available capital to purchase the equipment outright. It offers more flexibility and lower monthly payments overall. While you do not own the heavy equipment at the end of the lease, you are given the option to buy the equipment out for a lower cost or lease a newer model at the end of the term.

Alternatively, with equipment financing, the ownership of the equipment is transferred to you once you satisfy all payment terms. Financing is the way to go when the piece of heavy equipment will last your business a long time. This way, you’ll own the valuable equipment in the end, but you will have lower, controlled payments.

It’s an Easy Application Process

The process is straightforward. Once you decide on a lender, their team of experts will help you maximize all benefits and ensure that the process goes smoothly. They will most likely require copies of bank statements, an equipment invoice, a brief application and any other relevant company information. Your application will most likely be approved within a day once all information has been reviewed.

Review the Payment Terms

As stated earlier, there are different terms provided for heavy equipment financing depending on whether you choose to lease or finance it. Various companies may offer different conditions which can affect your monthly payment. These may include varying interest rates, the length of the loan, down payments, etc. By doing your research, you will ensure that you choose the terms and conditions that suit your business best.

The Bottom Line

With these facts in mind, you’ll be able to make an educated decision the next time you find yourself shopping for heavy equipment financing. Contact a lease specialist today to find out how we can help!