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Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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Is an Equipment Loan Right for Your Small Business?

 

Does your business need expensive equipment to get started, or simply to remain competitive in an evolving industry? Don’t have the money to invest in such a costly piece of equipment? Well, the good news is that you have financing options available.

 

Making the Case for Equipment Loans

The ironic thing about business – and really life in general – is that you need money in order to make money. In order to grow your business and drive revenue, you need equipment. But in order to purchase equipment, you need money. It’s a vicious cycle that can drive entrepreneurs and business owners crazy.

 

Thankfully there are ways to grow your business and remain competitive, even if you don’t have thousands of dollars sitting around somewhere waiting to be spent. An equipment loan is a great place to start.

 

“Equipment or asset financing is an arrangement where a lender agrees to loan a business some money for the purposes of purchasing new equipment. The newly acquired equipment is what will be used as security for the lender’s loan,” Equipment Loans Online explains.“The main purpose of this arrangement is to preserve cash flow for the business.”

 

If you’re unfamiliar with equipment loans – or have never considered one in the past – you’re probably unaware of the benefits they yield.

 

Let’s look at a few of the top ones to get a better idea of what a loan may offer your business.

 

1.   Easy Access

One of the best things about an equipment loan is the approval process tends to be easy going. Whereas some loan products require you to provide lots of paperwork and wait weeks to hear back, most equipment loan lenders will approve or deny you within a few hours or days.

 

2.  Preservation of Cash Flow

Every loan is structured differently, but many equipment loans don’t require a down payment. This means you can purchase top of the line equipment without impacting your present cash flow situation. Some loans even cover a percentage of the soft costs associated with equipment – such as freight charges, fees, delivery expenses, and setup and installation. This working capital can then be applied to other areas and situations where there’s a pressing need. 

 

3.  Added Value to the Business

In addition to protecting your company’s cash flow, a good equipment loan will actually boost your net value and make your business appear more attractive to investors, clients, and stakeholders. It also allows you to remain competitive with other businesses in your industry, even if they have larger sums of working capital.


4.      Increased Revenue

Most businesses invest in equipment in order to help them perform some sort of value-adding task. Whether it’s faster manufacturing, better service performance, or anything in between, the right piece of equipment can help you drive sales and increase revenue.

 

5.  Peace of Mind

As much practical value as equipment loans provide your business, the intangible perks are just as important. A good equipment loan provides peace of mind and allows you to rest easy knowing your business will continue to operate efficiently and effectively for months and years to come.

 

Don’t Let Finances Hold You back

It’s easy to become paralyzed by your financial situation. When you’re strapped for cash, your first inclination is to be anxious. But remember that financing exists for a reason. Whether it’s a brand new machine for your production facility or a piece of industrial equipment that you need to complete a project for a client, equipment financing can help you accomplish your goals. Now’s the time to see if it’s right for your business.

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