Running a business is no walk in the park. If you handle your finances well and make great investments early on, your business might well be on its way towards growth in no time. One of the many decisions that you may need to make for your business is taking equipment finance loans.

A lot of businesses would be rendered handicapped without the right tools and equipment after all. A factory would be unable to produce goods and products for their customers, and so on. Many businesses are able to pay for this machinery up front, but over the years taking out equipment financing has proven more beneficial.

What is an equipment finance loan?

Equipment finance loans are loans used to finance tools and equipment that are necessary to keep the business running. This kind of loan can cover everything related to the equipment and machinery, from purchasing the equipment, maintaining, and repairing them as well. Without this loan option, many businesses would suffer from purchase and respective upkeep.

Why take a loan out if the business can pay for it upfront? Many financial experts would argue that purchasing equipment at full price would be more like a liability than an investment in the world of business.

Special equipment required in certain businesses, for instance, easily replaced by newer models. Five years down the road, you might find yourself having to shell out more money just to upgrade. Such a case would be unfortunate, especially when equipment finance loans can open up more convenient options to dispose of old equipment (which will be discussed further later.

What is an equipment finance loan?

 

Equipment finance loans are loans used to finance tools and equipment that are necessary to keep the business running. This kind of loan can cover everything related to the equipment and machinery, from purchasing the equipment, maintaining, and repairing them as well. Without this loan option, many businesses would suffer from purchase and respective upkeep.

Why take a loan out if the business can pay for it upfront? Many financial experts would argue that purchasing equipment at full price would be more like a liability than an investment in the world of business.

Special equipment required in certain businesses, for instance, is easily replaced by newer models. Five years down the road, you might find yourself having to shell out more money just to upgrade. Such a case would be unfortunate, especially when equipment finance loans can open up more convenient options to dispose of old equipment (which will be discussed).

The benefits that come with equipment financing does not just end with equipment disposal

 

 

Here we will discuss further the many ways that equipment financing can help your business. 

 

1. Keep Your Cash Flow Intact  

Cash-on-hand is important for overhead expenses and other unexpected costs that come your way. Cashflow shortages happen too often in any business. At least with equipment financing, you will have more working capital to keep your business running smoothly. If you were to also add the payment for equipment into the equation it could make things worse cashflow-wise. 

2. Free Up More Lines of Credit

Taking a loan to finance your equipment does not always affect your other lines of credit. It can further empower you to preserve as much working capital as possible without exhausting finance options for other aspects of your business. This means that you are still free to apply for other loans and still keep a positive working relationship with other lenders.  

3. Protect Your Business from Inflation 

Equipment, like most other business expenditures, depreciates quickly. Every year that lapses their value generally depreciates, which can open up for a lot of inflation issues. You could suffer from the consequences if you pay for it upfront or if you put out a large down payment right off the bat. Plus, you can make smaller payments over time which would free up cash flow in your business. 

4. Get Full Financing Options

There are tons of equipment financing options out there. Perhaps the most recommended option is full financing. Open up more opportunities and shed off some of the financial burdens off your finances. Some equipment requires special software and installation process for instance; full financing options can cover everything including that. Reputable lenders even offer little to no down payment and fixed-rate loans. 

5. Change Out Old Equipment Efficiently

Business machines and equipment get replaced every couple of years. For some, it takes about five years before upgrades are necessary, while others can hold out for 10 or even 20 years. But are you willing to have your operations run through outdated equipment? Are you willing to take the risks of being left behind by other companies who have caught on with newer models? 

The good news is that disposing of old equipment will be so much easier with equipment finance loans. Some lenders are more than happy to grant you quick reliable loans to take the older models out of your hands and replace it with new ones. 

6. Experience No Hidden Charges  

Most business owners’ bad experience with loans often included ones that came with hidden charges. The financing solution that was supposed to make things easier for them turned out to be a nightmare that exhausted all their resources. That is why another important factor when looking into equipment financing is to find a lender who can provide loans without the hidden charges. Remember to check the fine print, too.  

7. Ditch Over-Taxed Purchases 

Different lenders might take on a different approach to equipment financing. But generally, this type of financing would be structured in such a way that the tax burden would be lighter on the borrower’s part. For the sake of clarity, however, we highly suggest going over the numbers with your accountant. Financial planning is crucial at this point. 

8. Choose from Multiple Repayment Terms  

Another great thing about equipment financing is that the repayment terms are highly flexible. Lenders will always be open to discussing how to go about the payment. Whether an 36-month repayment plan will be more suitable for your business or even a 5-year one, you can choose from multiple options. That is, of course, if you work with credible lenders.  

9. Easy Application Process

Applying for equipment financing loans is easy. Gone are the days when you have to line up and wait around all day for loan approval. Lending companies are getting more receptive to client needs which means that applying can be done online or by appointment.  

Here at Nu-Age Loans, for example, all you have to do is reach us through our contact number and a representative will walk you through our services shortly or apply online today. 

If you require equipment finance loans, then feel free to work with Nu-Age Loans. We have a number of options to offer you and customise loan solutions for every client. So, no matter which industry you belong to, you can rest assured that we can provide options for you to choose from. For enquiries on refinancing and other finance options, get in touch with our team.