If you have a business, you may have already heard of equipment financing. If not, you may be wondering how to get it. Equipment Finance Melbourne are available from many different sources, including banks, factoring, online lenders, and SBA loans. In this article, we’ll discuss some of the options available to you. The most important thing to remember is that you should shop around for the best loan product to fit your specific needs.
Lendio
If you’re looking for a way to finance your equipment purchase, you may be considering Lendio equipment financing. The website matches you with a lender to find the best loan for your needs. You can apply online in less than 15 minutes and receive funding within 24 hours. You can also take advantage of other services offered by Lendio, like its direct customer service. To help you make the right decision about your financing needs, Lendio offers a variety of financial products, including merchant credit card, American Express merchant financing, acquisition loans, and business line of credit.
Factoring
Factoring is an alternative to leasing and loans, which allows a business to get advance funds on the amount owed by its customers. Factoring allows a business to use the funds for a variety of purposes, from paying bills and employees to purchasing equipment. It is an excellent resource for companies that have a high turnover rate and need quick cash. For this reason, factoring is often used in the manufacturing and transportation industries.
Online lenders
Small businesses with less than perfect credit can find new financing options with online lenders. Many lenders will offer equipment loans, but you may have to meet certain requirements, including a history of bankruptcy. Other restrictions apply, such as a business that has only been open for one year. However, if you are willing to be creative and search hard enough, you can still find financing. Read on for some ways to find equipment financing without a poor credit score.
SBA loans
The majority of businesses that need SBA loans for equipment financing do not have a large bank account. While a business can write a check to pay for new equipment, big purchases can completely wipe out a business’s working capital. An equipment loan can help a business maintain working capital, which can be used to handle payroll, utilities, marketing and other expenses. Getting an equipment loan can help you avoid such problems.
Self-secured loans
A self-secured loan for equipment financing uses the equipment for collateral. The lender places a lien on the equipment, or other business assets, and may require a personal guarantee from the borrower. If the borrower fails to pay back the loan, their personal assets and business assets may be forfeited. Many lenders offer different repayment options, including amortization over the life of the equipment. You will also need to carefully assess the value of the equipment and determine whether it’s worth it.
Leasing instead of buying
When choosing between buying and leasing for your business, there are several factors to consider. Purchasing equipment builds equity and you can sell it at a later date for a profit. Leasing, however, carries interest rates, early termination fees, and replacement costs. If you plan to keep the equipment for more than five years, it may be better to invest in a capital lease or bank loan. Leasing is a legally binding contract between a lessee and asset owner.
Down payment requirements
Before applying for equipment financing, consider your business’s financial capability and the down payment requirements. Small businesses that are new to the lending process may find it difficult to qualify. However, if you have been in business for six months or more, your credit score may be sufficient. To get approved, you’ll need to show lenders that you can afford the loan, and have a viable business plan to prove your growth potential. Also, new businesses are generally considered to be riskier than established ones, so down payment requirements may be higher.