Equipment financing is a business process which can help your company finance all or almost all of the funds needed to purchase new equipment for your business. This might be heavy machinery, computer equipment, or vehicles which you need to conduct business, and getting that equipment financed can provide a big boost to your business.
Qualifying for equipment financing
Most businesses will be able to qualify for equipment financing loans, and the amount that you qualify for will depend on the equipment’s value, your credit score, and the financial history of your business. The reason that most businesses will be able to qualify for financing is that the equipment itself serves as collateral, so most lenders are more concerned with your borrowing history than what your credit score is.
Applying for equipment financing
It’s a fairly simple process to apply for equipment financing, although that will always depend on the lender that you are working with. For starters, you’ll have to supply documentation that demonstrates the overall health of your business, such as bank statements, tax returns, and all the typical financial documents used in business. You’ll also have to provide your credit score, and some information about the equipment that you want financed, as well as an estimated cost of that equipment.
How equipment financing works
If you have ever taken out a car loan, you are already familiar with the basics of how an equipment loan will operate. The price of the equipment itself will determine the amount and the terms of any financing which you obtain for the equipment, and you won’t have to supply any additional collateral. If you should default on making any of the payments of your equipment loan, the lender would have the right to seize the equipment to recover the amount of any lost funding.
For the most part, business equipment loans are offered with interest rates that are fixed at some rate between 8% and 30%, with term lengths which are pre-set. That means you can expect to pay the same amount every single month, until the duration of the equipment loan has expired and you have completely paid off the equipment.
Equipment financing with Capital Connex
If your company needs equipment financing in order to achieve that next level of success, we may be able to help.
Contact us at Capital Connex, so we can discuss options with you for financing that all-important business equipment you need.