Frequently Asked Questions About Equipment Financing

Equipment is a vital component of a business. The problem, however, is that it can be expensive. Not only that, but new developments constantly render older versions obsolete. Fortunately, equipment financing can help. Here are some of the most frequently asked questions about this incredible solution.

How is Financing Different Than Leasing?

Equipment financing and leasing have some similarities, but they also have some significant differences. When you finance, however, the equipment is yours. With a lease, the lender typically has ownership of the equipment and you pay to use it. Both options have their benefits as well as drawbacks. A financing expert can help you to understand the differences and find the best option to meet the needs of your business.

Can I Finance Used Equipment?

In short, yes, you can finance used equipment. It may be a bit more challenging, though. Some lenders prefer to provide financing only for new equipment. You may need to put more effort into finding a lender willing to work with you, but so long as the equipment is in good working order and will maintain its value, you should be able to find someone.

Where Can I Get Financing for Equipment?

One of the most common places to find financing for equipment is a traditional bank. Large, national banks as well as small, local ones may offer financing options for businesses. If you search online, you’re likely to come across industry-specific lenders that specialize in equipment leasing and financing.

Isn’t It Better to Pay Cash?

You could pay cash, but if doing so stretches your cash flow too thin, you can cause some serious harm to your business. Financing provides you with the equipment you need for a much more manageable monthly payment. You preserve your cash flow, which enables you to pay your bills and take advantage of other opportunities that may come your way.

What if My Credit Score Isn’t That Great?

Your credit score plays a significant role in many types of financing, such as business loans, personal loans, and credit cards. When it comes to financing for equipment however, it’s not the only factor. While banks and non-specialized lenders may have strict requirements, specialized lenders tend to be more forgiving. Even if you have less than perfect credit, you may still qualify for financing.

Equipment financing can help you get the equipment you need to run your business successfully. Check out a few different lenders to find the best rates and the best deals for you.