When you’re looking to purchase new equipment or tools for your business, it can seem like you have to spend tens of thousands of dollars to get your business up and running right away. The good news is that you don’t have to settle on this, as there are other ways of getting the equipment you need without spending too much upfront. Equipment loans are a great way of getting started in business with the equipment you need without breaking the bank!
What Are Equipment Loans?
Equipment loans are a type of asset-based lending. This means the lender is lending money based on the value of your assets, not your credit score. It’s worth noting that equipment loans don’t have collateral requirements like traditional loans, so they’re often more accessible than other types of financing.
What Is an Equipment Lending Company?
Equipment lending companies are corporations or organizations that typically lend out equipment for a small fee. The equipment ranges from heavy-duty construction vehicles to lawn care tools, and even recreational gear like fishing poles. If you need something that is expensive but only need it for a short period of time, an equipment loan may be your answer.
What Types of Companies Can Give Me an Equipment Loan?
Equipment loans can come from a number of different places, including banks, the federal government, or your own company. The type of loan you get will depend on the nature of your business and how much money you need. If you are borrowing less than $250,000 then you will likely receive an asset-based loan from either a bank or another business that specializes in this type of lending. Above this amount, your options widen and include government-backed loans as well as those offered by private lenders.
Who Pays For My Lease Agreement, Insurance, Taxes, and Repairs?
This is where most of the costs are covered by your leasing company or the person who lent you their equipment. If you are loaning out your equipment, it’s important to know that you will be responsible for all of these expenses. This is especially true if there is a mishap. Your insurance may not cover any of this.
If you don’t have the money for the upfront cost of equipment, an equipment loan might be what you need. This guide has helped you understand how they work and where to find one.