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Equipment Financing

Don’t pay cash for equipment when you can pay over 5 years!

Interested in Equipment Financing?

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  • Amount

  • Please enter a number greater than or equal to 25000.
  • in years

Loan Amounts

$25,000 – $5,000,000

Terms

1 – 5 Years

Rates

5.25% – 24.99%

Speed

as little as 24 hours

Equipment Financing

What is Equipment Financing?

When looking to purchase equipment a business owner can use operating cash flow or they have the option of utilizing a variety of attractive Equipment loan programs available to them. Equipment business loans is a form of term financing that amortizes over 12 to 60 months and can be used for a wide range of equipment purchases. Whether it be for construction equipment, phone and computer systems, copiers and printers, or vehicles, there are programs available with terms that are typically better options than paying with cash.

What are the rates for Equipment Financing?

Equipment financing terms range based on factors associated with the business owners credit, the trade history of the business, the financial strength of the company, and the type of equipment that’s being purchased. While rates can start as low as 5.25%, the rate is dictated by an array of factors. Like any type of financing, credit plays a role in the rates and terms that are offered, but the equipment type can play as equally as large role. As an example, fork lifts have a long life span and are considered great collateral for equipment lenders, while computers and phone system have to be frequently replaced, depreciate quickly, and have a very low residual value.

How long can you finance Equipment for?

Equipment can be financed on terms anywhere from 12 to 60 months with the averaging financing term being 48 months. The terms on equipment financing programs are longer than most financing products, which allows for lower monthly payments and less stress on a company’s cash flow. The biggest two factors in term length is the type of equipment being purchased and the credit quality of the company. Equipment with long lifespans such as CNC machines or fork lifts have high residual values and longer terms, while copiers and printers have low residual values and are financed on shorter terms.

How to apply for Equipment Financing?

The application process to apply for Equipment Business Loans is very quick and easy when under $200,000. When the equipment is under $200,000 the complete application and closing process can be completed within 24 hours. “Small ticket” equipment loan decisions are heavily driven by the equipment type and the credit quality of the business owners. With strong personal credit, a long time in business, and high residual equipment, you can expect the application process to take just 24-48 hours. When the equipment purchase is over $200,000 the process is still streamlined, but there is more financial information required before closing. This process can take anywhere from 7 to 14 days due to the higher ticket price, or the larger loan amount.

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What are the best industries for Equipment Business Loans?

Equipment loans can be used by a wide variety of industries with very little restrictions. Whether business to business (b2b) or business to consumer (b2c) industries, there are still requirements for equipment purchases. Some of the industries that we’ve provided Equipment Financing to are; trucking, warehousing and logistics, healthcare, manufacturing, wholesale, technology, and retail.

Transportation

The transportation industry relies on financing to purchase trucks and trailers. There’s a lot of wear and tear on this equipment and constant repairs and updates are needed. With truck financing, transportation companies are able to purchase new equipment that requires less up keep and is more reliable. Anytime a truck goes down business owners are missing out on revenue generating opportunities. Trucks and trailers are expensive to purchase and some times not attainable with out financing. Rather then leasing the equipment and paying a monthly rate, once the equipment is paid off business owners now own the equipment outright. Having additional trucks on the road brings in added revenue and the return on the investment of equipment is substantial.

Medical Practices

The Medical industry requires a substantial amount of equipment and machinery to operate effectively. Companies use financing to update old equipment and purchase the newest equipment. The medical industry relies on this equipment to ensure patients receive the best treatment possible. There are times when companies don’t have the proper equipment and have to refer patients to other practices. This not only makes companies look unprepared but also costs them potential added revenue.

Construction

Construction companies are constantly in demand for new equipment and machinery to take on and complete new jobs. Each project is unique and requires specific equipment. Some construction companies don’t have the working capital to purchase the equipment with cash and finance the equipment over multiple years. The construction industry can deal with longer payment terms and costly up front expenses, without financing a lot of business owners not have the cash flow to purchase needed equipment.

Restaurants and Hotels

The Hospitality industry requires constant upgrades and repairs. In the restaurant industry you need to purchase commercial ovens, refrigerators, stoves and other equipment. These are expensive purchases and can be difficult for a businesses cash flow to sustain with out having the proper financing. There is a considerable amount of equipment and machinery needed for a hotel to operate efficiently. Hotels are responsible for everything from furniture, wash and dryers, and transportation vehicles. Hotels have to constituently update their equipment to keep up with the current trends as well as their competition. The overhead expenses are mind blowing and can be drastic to a hotels cash flow if there is not the proper financing in place.

Advantages to working with SMB Compass

SMB Compass works hand to hand with business owners to secure equipment financing in a wide range of industries. SMB Compass specializes in providing financing that is affordable and flexible for any business. We ensure that the payback is stretched out long enough that the cash flow can support it and the business can operate efficiently. It’s important to us that the return on the investment will not only cover the expense of purchasing the equipment but also provide additional revenue.

Clients who have used Equipment Financing

One of our clients owns a medical practice and had been referring clients to other doctors for services they weren’t able to provide. By providing the additional services it enabled them to capture 15% more revenue without adding new patients to their practice. In addition to the increased revenue from existing patients they were also able to market the new services to prospective patients. Rather then using cash from the business to purchase the equipment we secured a $110,000 equipment loan over 5 years. The increase in revenue quickly covered the monthly expense of the equipment, before marketing for prospective patients!

A client that owns and operates a transportation company had the opportunity to take on a new contract if he was able to get 2 more trucks on the road. They had 4 trucks on the road and had paid in cash for those when they purchased them. This had drained their operating cash flow and they couldn’t afford to pay for the two new trucks. They were considering leasing the 2 trucks but the monthly leasing payments would be expensive and included additional fees dependent on the miles they traveled. We were able to finance 2 trucks and trailers for them valued at $160,000 over 4 years. They were able to take on the new contract that is generating them an additional $45,000 in monthly revenue. The monthly payments turned out to be less then it would have cost for them to lease the trucks and after the term is over they own the trucks outright!

One of our clients owns a paving company and had been losing out on business opportunities because he could not take on longer commercial projects. He started the business 6 years earlier as the business has grown he has been offered more opportunities. He wanted to grow his business and knew that he needed more equipment to be able to work multiple jobs at once and take on these bigger projects. This equipment was expensive and he didn’t have the extra working capital to purchase the machinery he needed. He originally looked to secure a loan but the longest term he could receive was 24 months and would be to high of a monthly payback. We were able to secure equipment financing that was stretched out over 5 years and would cause less stress on his cash flow. He purchased 4 new pieces of equipment and was able to dramatically increase the company’s productivity. He now his enough equipment to take on larger projects and works multiple different projects at one time. After our assistance with the financing the business is quickly expanding and generating more revenue then ever!

FAQ About Equipment Financing

What is equipment financing?

Equipment financing is a common way businesses purchase Equipment and Machinery through the asset they are purchasing. Equipment can be financed over long terms and a lender wants to ensure a business has good credit history and will operating efficiently over the term of the financing.

How do you qualify for equipment financing?

The determining factors in qualifying for equipment financing is based on a businesses credit and time in business. You can be prequalified for equipment financing by providing bank statements and a credit report before the purchase of any equipment or machinery.

How long does the application process take for equipment financing?

The equipment financing application process timeframe varies depending on the type of equipment being purchased. You will need to provide an invoice of the equipment, bank statements, and complete an assortment of documents.

How would you use equipment financing?

Equipment financing is used by businesses to purchase equipment and pay it off over a stretch of time, helping them to properly manage their cash flow.

Is collateral required for equipment financing?

The equipment or machinery being purchased is required to be used as collateral for equipment financing. After the equipment is paid off during the duration of the term the business owns the equipment outright.

What are the different types of equipment financing?

Equipment financing can be structured in a multitude of ways. Equipment financing be used for a wide array of products and can amortize over anywhere from 12 to 60 months.

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FAQ About Equipment Financing

What is equipment financing?

Equipment financing is a common way businesses purchase Equipment and Machinery through the asset they are purchasing. Equipment can be financed over long terms and a lender wants to ensure a business has good credit history and will operating efficiently over the term of the financing.

How do you qualify for equipment financing?

The determining factors in qualifying for equipment financing is based on a businesses credit and time in business. You can be prequalified for equipment financing by providing bank statements and a credit report before the purchase of any equipment or machinery.

How long does the application process take for equipment financing?

The equipment financing application process timeframe varies depending on the type of equipment being purchased. You will need to provide an invoice of the equipment, bank statements, and complete an assortment of documents.

How would you use equipment financing?

Equipment financing is used by businesses to purchase equipment and pay it off over a stretch of time, helping them to properly manage their cash flow.

Is collateral required for equipment financing?

The equipment or machinery being purchased is required to be used as collateral for equipment financing. After the equipment is paid off during the duration of the term the business owns the equipment outright.

What are the different types of equipment financing?

Equipment financing can be structured in a multitude of ways. Equipment financing be used for a wide array of products and can amortize over anywhere from 12 to 60 months.