An equipment loan usually involves less time to apply and often will get a faster answer from the bank than a typical small business loan – usually within a few days of submitting an application. Leasing can be considered as a good option if you don’t have a sizable down payment for the equipment you need, or it’s more likely to get obsolete before the lease declines. If you decide to purchase the equipment at the end of the lease, equipment financing still exists as an option for you. Before equipment financing became a digitized process, getting approved could take days or even weeks.

Small Business Equipment Financing

Equipment finance in India is advantageous to organizations of all sizes. First things first, let us take care of the ambiguity about equipment financing. Small business owners often make the mistake of associating equipment financing with heavy duty equipment. The truth is, construction equipment can be financed just like other small equipment.

Equipment leasing

Leases can be easier to qualify for and sometimes have more flexible terms when compared to an equipment loan. Plus if you are leasing equipment that needs to be upgraded often, you may be able to include lease terms letting you exchange the equipment for an upgrade after a certain period of time. Business equipment financing helps you finance up to 100% of the new or used equipment you need for your business. Applying for an equipment loan is typically a fast and easy way to finance the purchase of most types of equipment—computers, machinery, vehicles, or whatever else you need.

  • Despite this drawback, leasing is a decent option for businesses with bad credit.
  • To qualify for a business credit card, issuers will generally look at your personal credit scores and combined income .
  • This is to ensure we don’t overburden small businesses with heavy monthly fees.
  • Even if you qualify for a larger amount, use only what you need to finance the essentials.

Longer term loans feature lower monthly payments, but can be more expensive over loan’s lifetime. Shorter term loans have higher monthly payments, but you’ll be in debt for less time and save on interest fees overall. Equipment financing is a type of asset-based lending that helps business owners get the funding to purchase or lease equipment without depleting their working capital. Credit approval is more flexible with this type of commercial banking because the equipment is used as collateral to secure the financing.

Documents required

Commercial kitchen equipment is very expensive so equipment finance could be the right option for you. There are several types of equipment finance / asset finance available to businesses of all types. Before you enter into any agreement for equipment finance or asset finance make sure that you consider how long you may need that equipment for.

Best Heavy Equipment Financing For Your Construction Business In 2022

Unlike other types of loans, which allow you more flexibility in how you can make use of borrowed funds, equipment financing is strictly limited to equipment purchasing. Yes, you can apply for used equipment financing with most online lenders that offer equipment financing. As long as the equipment is in good condition and still has longevity, most lenders will accept your application. Only some equipment finance lenders will require a UCC filing.UCC filingsgive lenders access to assets or a blanket lien if the loan defaults.