If your equipment contributes to the success of your small business, you know that if you don’t have high-quality equipment, it can affect the quality of the products or services you provide. However, the latest high-quality equipment comes at a steep price; which most small business owners cannot afford upfront. When it comes to buying equipment, it might be tempting to settle for cheap rather than quality. Fortunately, you don’t have to. With equipment financing Detroit, you can easily secure equipment loans for your business.
Equipment financing allows you to acquire the necessary equipment without having to drain your business bank account. However, just like other kinds of business loans, potential lenders only provide financing to eligible businesses.
Before applying for equipment financing, here are four insider tips that will help you qualify:
1. Pinpoint the Reasons for Needing the Loan
Potential lenders need to know why you need to borrow money from them. You need to be able to answer specific questions they might ask when you apply for equipment financing, such as:
- Why do you need an equipment loan?
- Why do you need that specific kind of equipment?
- How will the new equipment impact your business overall?
These are just some of the question’s lenders may ask, so it’s better to prepare beforehand.
2. Increase Your Chances of Qualifying
As you search for lenders, be sure to find out what their eligibility requirements are because this varies from lender to lender. It’s important you meet their basic requirements before applying to avoid wasting your time. Some of the common factors a lender looks at may include, but are not limited to:
- Credit Score
- Time in Business
3. Determine If Your Business Can Afford A Down Payment
Some lenders ask for a down payment as a precondition to approving an equipment loan application. Potential lenders want to see that you’re vested in purchasing the equipment. It also shows them that you’re confident you are able to repay the loan. Generally, down payments range from 5% to 10% of the total equipment cost.
If you’re unable to provide a down payment, chances are, you’ll be denied the financing. Your options then amount to searching for a different lender, improving your current financial situation, and, or attempting a different financing solution.
4. Know Your Options
When you start applying for a loan, keep in mind that the application process will vary depending on the lender. It’s smart to compare your options before deciding, but make sure you don’t apply to multiple lenders at once because it can affect your credit score. Furthermore, don’t take out another loan if you’re paying off a previous one. If your equipment financing is not enough to cover your needs, then it’s best you look for a different financing solution rather than seeking another loan.
Equipment Financing Detroit
Equipment financing Detroit is a great option for business owners looking to purchase or lease equipment. SMB Compass finance experts offer equipment loans or leases for small businesses like yours.
Don’t hesitate to give us a no-obligation call today at (888) 853-8922 and talk to one of our finance specialists.