You probably searched for equipment financing loans, but if only it were that simple! To get the best rates you need to consider a range of options. Yes, equipment financing, but what about equipment leasing? And beyond this there are several other types of loans that could work just as well and maybe at a lower cost (APR).
- Make sure the loan term is not longer than the expected life of your equipment or you won’t be able to replace it when the time comes
- A Small Business Administration (SBA) CDC/504 loan will be the least expensive option, but it’s difficult to quality
- Equipment financing is different to equipment leasing, both have pros and cons
- Compare the cost of all these loan options against a term loan or a line of credit to make sure you get the best deal
- To avoid putting your home at risk, you’ll need to understand how the loan is being secured
- To understand the monthly repayments and total cost of the loan, we recommend a loan calculator
- Even if you have an urgent need, get at least three different quotes from different lenders to make sure the loan is competitive
- Before financing your equipment, make time to cover all of the recommended reading
The following articles provide essential reading when considering equipment financing loans. All of them have a vested interest of one kind or another (often affiliate marketing commission) but the information they provide is credible and informative. What they don’t cover, is your responsibility to find out!
Fit Small Business explain what an equipment loan is and how it works. They also cover the differences between equipment financing and equipment leases. Ignore their lender recommendations, as to find out which loan is best for your specific circumstances, you need to find out for yourself.
This article from Inc. provides you with a solid list of questions that you should ask each lending provider that you decide to get a quote from. You also need to ask whether the lender will require a personal guarantee or a lien over your business assets.
In this article, Bankrate provide a simple business loan calculator. This allows you to workout what your monthly repayments will for a given loan offer and also what the main cost of borrowing will be. In addition to this, most online lenders charge additional fees, which you need to ask about when speaking to lenders at the next stage.
This article from Fundera covers more on how equipment financing works. You can get a quick summary of equipment financing at a glance, a summary of other options available to you and a overview of how equipment financing works. If you sign-up, they have a team of small business financing experts you can get free advice from.
Nerd Wallet are one of the better small business financing blogs. In this post, they provide a table that summarizes most of the main equipment financing options available to you. At a glance you can pick-up which lenders you qualify for. Then, you can get a quote from each before making your own decision.
The Juice Press
Understanding how to find the best equipment financing loan for your small business is worth taking the time to understand properly. This is the advice that thousands of borrowers who got sold the wrong loan for their business will tell you. Hopefully this post and recommended reading will help set you on the right path. And if you have any questions, just ask away using the comments section below.