More often than not, many small companies and startups don’t have the working capital to purchase new equipment upfront. This can be an enormous challenge, especially when your business relies heavily on equipment in order to operate efficiently. Fortunately, Equipment financing Long Island allows businesses to borrow funds for purchasing or leasing new equipment and machinery.
Applying for Equipment Financing Long Island Made Easy
Applying for equipment financing can be confusing if you don’t know where to start. With that in mind, here are four tips that will show you how to streamline the equipment financing application process:
1. Check If You Qualify for Equipment Financing
Applying for a loan you don’t qualify for in the first place is a total waste of time. As you search for the best lending company for you, make sure to check out their requirements as it varies from lender to lender. It’s important to assess whether you meet the basic prerequisites before you apply for a loan.
Most lenders, if not all, will check the following your credit scores, number of years in business, your business’ profitability, and more. Remember that some lenders may ask for more while others have less stringent requirements.
2. Organize Your Paperwork Properly
Regardless of the type of financing, lenders want to see appropriate paperwork. Generally, they will ask for three to five years of your business’ budget information, tax statements, as well as other financial assessments (if any) by third-party companies. Once you have all your documents organized and in an orderly fashion, the processing of your equipment financing application becomes faster and easier.
3. Find the Right Lender
When searching for a lender who is just right for you, seek out a financial provider who’s willing to work with you on a long-term basis. Don’t settle for lenders who only process one-time, high-dollar equipment needs. Additionally, choose a lender who can provide a variety of loan options aside from equipment financing, such as invoice factoring, a business line of credit, and more.
When it’s all said and done, a lender who is just right for you understands the needs of small businesses. They should also be able to recommend specific financing solutions tailored to your unique business’ goals and needs.
4. Decide on Your Type of Financing
When applying for equipment financing, ask your lender to review the various financing options that are available to you. There are two main types of equipment financing – equipment loans and equipment leases, so make sure to consider your company’s immediate and long-term needs when deciding upon your ideal financing solution.
The concept of equipment leasing is similar to renting an apartment. You can lease a piece of equipment for a fixed period and once your term is over, you have the option to purchase the equipment or renew the contract. Equipment loans, on the other hand, are for businesses looking to borrow money in order to purchase used or new equipment.
5. Assess Your Finances to See if You Can Afford a Down Payment
In some cases, lenders often ask for a down payment before approving your loan. Lenders want to make sure that you are vested in the equipment you’re going to purchase and down payments make lenders more confident that you will pay back the loan. Down payments can range from 5% to 10% depending on the lender you’re working with.
If you don’t have enough cash flow to make a down payment, there’s a great chance that lenders will not approve your loan. Your next option would be to find a more lenient lender, improve your cash flow performance, or apply for another type of loan.
6. Value Your Lender-Borrower Relationship
The relationship between a lender and you the borrower is more than a simple business transaction. A reputable lender treats loan applications as a relationship. They understand that the success of your business is their success. Subsequently, it’s in their best interest to make sure your business gets the right financing solution.
Know More About Equipment Financing Long Island Today!
By understanding these tips, you’re sure to secure the best equipment financing solution available for your business, enabling you to lease or purchase the equipment you need without draining your working capital.
If you want to discover how equipment financing Long Island, can be an ideal financing solution for you, get in touch with a financial expert with experience in your industry. They can tell you all about the ins and outs of equipment financing, as well as other types of loan programs that may be right for you. Financial experts make sure your business receives the absolute best financing solution suited to your needs.