Common Questions on Equipment Financing

Obtaining the equipment you need to run your business is important, but you may not always have the funds for it. This lack of funds can complicate the issue, and you may need to look into equipment financing. This form of financing can provide you with the funds you need to purchase new equipment and keep your business running. Here are some of the most common questions associated with this form of financing.

Is This the Same as Leasing Equipment?

Financing and leasing are two different things. When you finance your purchase, you receive a loan for the equipment. When leasing a product, the leasing company has purchased the product. While they are similar in concept, they are two different things.

How Difficult Is It to Obtain Equipment Financing?

If you have good credit and payment history, then this financing should be a breeze for you to get. However, if you have struggled with making timely payments and it has negatively impacted your credit, don’t despair. Credit issues are a common issue, and honestly, maintaining good credit can be a challenge. You simply need to find a creditor willing to work with you. Ask around for recommendations and research to find lenders who are more inclined to say yes.

Can You Finance Used Equipment?

You may be planning to purchase used equipment to save money, and sometimes lenders are comfortable with this. However, most of the time, they will want to finance new equipment. The reason for this is simple: new equipment is far less likely to break or have problems, which means it is less of a risk for them to lend you the money for it. However, similar to bad credit situations, you just need to do some research to see if you can find a lender that is comfortable allowing you to finance used equipment.

Should You Pay Cash if Possible?

While you may have the cash to purchase this equipment on your own, it may not be in your best interest. Paying with cash can put a significant dent in your account and disrupt your cash flow. This interruption in cash flow can be a problem if an emergency comes up or you spend more money than you intended. Equipment financing can make the burden of purchasing expensive equipment more manageable.

Using equipment financing to get the equipment needed for your business is a great way to get things up and running or to upgrade old equipment. Consider this option when it’s time to upgrade your business.