Whether you’re a young or small business owner, you know that staying on budget and growing are two fundamental aspects of a successful business. When it comes to obtaining new equipment for your business, you may have options between traditional banks, cash, and equipment financing lenders.
There are several myths about equipment financing that get thrown around, making it difficult to separate fact from fiction. We’ve gathered a few myths and debunked them so you can find the funding you need for your equipment.
- You should always pay cash for equipment.
- Financing is too expensive.
- It’s better to get a loan from the bank.
- You need perfect credit.
- You can’t finance used equipment.
- Financing paperwork is complicated and messy.
MYTH #1: You should always pay cash for equipment.
Obtaining new equipment can be expensive. Countless businesses have gone under because they lacked liquidity. With equipment financing, you don’t have to drain your bank account. Equipment financing can help you get the funds you need to grow your business while still keeping cash-on-hand to invest in other areas of your business. Enhance marketing efforts, fulfill day-to-day expenses, or be ready for unexpected emergencies by conserving your cash.
MYTH #2: Financing is too expensive.
One of the most common myths about financing is that it is too expensive. In reality, financing isn’t unreasonable. Financing breaks down a significant expense into affordable monthly payments, making it easier on your bank account. Maintain a steady cash-flow monthly compared to buying equipment outright.
MYTH #3: It’s better to get a loan from the bank.
Bank loans are helpful if you have a long-standing relationship with a bank. However, securing financing through a traditional lender can be a slow and complicated process. On top of that, traditional lenders have strict criteria to qualify that can cause them to overlook your business if it’s a start-up or has challenged credit. Instead, focus on finding a lending partner who knows the value of your equipment and believes in small businesses.
MYTH #4: You need perfect credit.
If equipment financing companies only worked with perfect credit, their deals would be few and far between. Although good credit often translates to better terms, businesses with challenged credit can still receive affordable financing plans. By taking into account other factors of a business, such as collateral values, pay history, and trade references, lenders can quickly determine the best way to get you the equipment your business needs.
Myth #5: You can’t finance used equipment.
You may have heard that getting financing for used equipment is difficult, but it doesn’t have to be. As long as the equipment you have in mind is in good working condition and you’re working with an equipment financing company that is prepared to finance used, you shouldn’t have any problems.
MYTH #6: Financing paperwork is complicated and messy.
Financing paperwork doesn’t have to be complicated if you pick the right financing partner to work with. There are financing companies that have simplified the financing process, so you can focus on growing your business. Keep in mind, the more information you provide upfront, the easier the financing process will be. With technology improvements and automated processes, you no longer have to worry about stressful paperwork.
Benefits of Financing
Now that we have busted the top 6 equipment financing myths, take alook at what you and your business can benefit from with equipment financing.
- Conserve your cash for times when you need it most.
- Fixed Payment. Avoid the rising cost of money and lock in a low monthly payment.
- Tax Advantages. Section 179 brings tax advantages to equipment financing.
- Conserve Bank Lines. Save bank borrowing options to support ongoing cash flow needs.
- Avoid Budget Restrictions. Acquire the equipment you need now.
Don’t Wait Any Longer
So, what are you waiting for? Get qualified for your next piece of equipment! There are many directions you can take when it comes to funding equipment for your business. It’s up to you to decide what is best for your business when it comes to your next equipment purchase. Don’t let your business miss out on the best possible financing solution. Apply today!