The Best Equipment Financing Options for Florida Businesses
As all small business owners know, it’s rare to have enough working capital to cover the expenses of upgrading or replacing equipment periodically. Fortunately, equipment financing makes it possible for small business owners to enjoy this new equipment, speed up their production, and take advantage of the growth opportunities it provides.
Getting that new piece of equipment isn’t just about wanting to get it for the fun of it or to keep up with the latest trends. You need it because it’s a key component of growing your business.
Upgrading your machinery is upgrading your overall business. New machinery and tools boost productivity, increases efficiency, and allows for better customer experience which all lead to accelerated business growth.
Equipment Financing: How Does It Work?
When business owners hear the words equipment financing, they often think about backhoes for tractors but equipment financing doesn’t just cover construction equipment. This type of loan covers almost any tools or equipment your business needs whether it’s big or small and basic or uncommon. Some of the most common equipment needs this kind of loan covers includes:
Office furniture and fixtures (cubicles, desks, lighting, and the like)
Appliances like refrigerators, telephones, and such
Commercial food processors, freezers, grills, and the like
Solar panels and HVAC units
Forklifts, conveyor belts, and workbenches
Delivery vehicles, company cars, trailers, food trucks
The amount you’ll be able to borrow would depend on the type of equipment you’re looking to acquire and whether it’s new or used. The terms of your loan then would depend on the price of this equipment. You also won’t have to worry about putting up any collateral because of the loan’s self-collateralized nature. Simply put, this means that the equipment is the collateral itself.
Equipment financing is not the same thing as equipment leasing though. Although it’s easier to qualify for equipment leasing, it’s only a temporary solution. You’ll have to return the equipment to the owner at the end of the leasing term unless there’s a renewal or buyout agreement. At the end of the term agreement in equipment financing, on the other hand, you’ll be able to own the equipment.
Equipment loans allow you to finance equipment with competitive rates. The guidelines are similar to traditional types of financing; however, the criteria are less stringent for equipment leases than loans. The equipment financed serves as collateral and the term is usually calculated of the expected life span of the purchased equipment.
After payments complete you own the equipment
If you have good credit and strong finances you can get competitive rates.
May need a down payment
Businesses in need of equipment with competitive financing rates.
Primary Benefits and How to Qualify for Equipment Financing in Florida
Like all other kinds of loans, equipment financing can help lessen the burden of huge costs that are necessary for your business to grow. One of the best things about equipment loans is their fixed rates usually ranging from 8% to 30%. They also have set term lengths so you’ll be paying the same amount each and every month. Requirements for this loan are also less stringent than other loans. And you’ll be able to get funding within days.
Your credit score is an important factor to qualify for this loan. The higher your score, the higher your chances of getting approved, and the better the term rates you can expect. Some lenders may require a business plan with a proposal for future growth plans. Lastly, they may also require a balance sheet or cash flow statement.