If you’re not sure how to purchase heavy machinery, manufacturing equipment, computer systems or other business equipment for your company, you’ll be happy to know that qualifying for equipment financing is much easier than you may think. Here are a few possibilities.
Small business loans aren’t just for real estate purchases. You can also put an SBA 7(a) loan to work for equipment financing and working capital. As long as you’ve been in business at least a year, and you qualify for SBA criteria as a small business, getting approved for this type of loan is practically guaranteed.
Even some startups can qualify for an SBA 7(a) loan. There’s nothing better than a new business having access to the latest equipment right off the bat. No matter what competitors have, you can compete successfully and even surpass their capabilities.
When people hear the word leasing, they often think of financing that is expensive. In reality, however, the opposite is true. Monthly payments with a lease are generally much less than if you were to take out a loan. Leasing also has other benefits for your business, such as increased flexibility.
With a lease, you can upgrade your equipment every time you sign a new contract, and you have no obligation with the old equipment. For tech companies, coffee shops, healthcare practices and other companies who need to upgrade often, leasing is one of the best options out there. Also, since the equipment acts as collateral, it’s often easier for new and small businesses to get approved with this type of financing.
Bridge Loans or Hard Money Loans
Short-term loans do carry higher interest rates than traditional bank loans. In exchange, they take far less time for approval and typically have lower credit score requirements. This option isn’t for everybody, but it can be a valuable way to get the equipment your company needs if you’re having trouble getting approved elsewhere.
Even large businesses use bridge loans. For example, if you’re waiting for a long-term loan to go through, but you need the equipment right away, you may be able to purchase it with a bridge loan and then transfer the amount to a low-interest form of equipment financing later.
It’s obvious that your business needs to have the best equipment to offer the best service. When it comes to investing profits into business growth, purchasing or upgrading equipment is one of the most effective ways to spend your money. After all, high-quality equipment pays you back everything you spend and then some.