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 Financing programs available to them. Equipment Financing 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.
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. Like any type of financing, credit plays a role in the rates and terms that are offered, but the equipment type can play an equally as large role. For example, phone systems and computers depreciate very quickly and become outdated fast, which means a lender may offer a shorter term and higher rates for the purchase. If a business were purchasing a forklift that has a 15-year life span and can easily be sold on the secondary market, the lender will offer a longer term and lower rate to the business.
The application process to apply for Equipment Financing 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. When the equipment purchase is over $200,000 the process is still streamlined, but there is more financial information required before closing.
SMB Compass's simple and secure online loan application can be completed in a matter of minutes. Quick & Easy!
After we process your application we will contact you and provide you with the best loan offer.
Once your loan is approved in as little as 24 hours. You will have capital deposited directly to your business bank account.
Equipment financing 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.
A business would use Equipment Financing to purchase new or used equipment without having to dip into its operating cash flow or reserves. Equipment Financing should be considered for every equipment purchase because of the attractive terms that are offered compared to terms offered for working capital financing. Even if you have the ability to purchase using just cash it’s still better to keep the cash in the company and amortize the loan over a few years. Lenders will allow early or faster prepayment which means by utilizing Equipment Financing the business is options.
One of our clients is trucking company based out of Missouri and operate their business with a fleet of 7 trucks, some of which they’ve owned for over 10 years. The older equipment were starting to break down on a regular basis, which not only costs money to repair, but the opportunity cost and lost revenue of not having the trucks operational was starting to add up. After working with the client for a week we were able to provide financing for 2 new trucks and the payments were amortized over 5 years!
If you’ve been in business at least one year, have at least $100,000 in annual revenue, and have a personal credit score of at least 600, you are eligible.
We use a number of different data points to instantly provide you with the best possible loan offer, including competitive rates and payment terms that work for you and your business.