When it comes to procuring equipment financing for your company, there can be a lot of conflicting information out there. It can be hard to determine the truth from fiction as you start researching some of the best ways to acquire new machines. It can be worth your time to sort through the misconceptions to make sure nothing is holding you back.
These are some of the top equipment financing myths and why they aren’t true so you can get the funding you need.
One of the biggest disservices you can do to your company is believe that you need a perfect credit score to qualify for equipment financing. Don’t count yourself out if you don’t have a spotless credit history. While having good credit might increase your chances of securing a loan, most lending institutions will look at more than just your credit. Make sure you talk with the financing companies you want to work with and see what kind of plan you can work out.
It can be hard to fathom why your company shouldn’t pay outright for new equipment if they have the cash to do so, but this purchase can drain your accounts. Equipment financing helps businesses get the funds they need to grow while simultaneously keeping their cash on hand to invest in other areas of their business. Not only that, but financing breaks down the total cost of the equipment into manageable monthly payments to help maintain a steady cash flow.
When businesses are not reliant on the latest technology, they can choose to opt for used equipment, but many think they are unable to finance a used piece of equipment. There are plenty of lending institutions that will lease or extend a loan for used equipment, you just have to search for the right one. As long as the piece of equipment is in good working condition without any red flags, you shouldn’t have a problem.
You don’t have to have any additional collateral to get a loan. While your company uses its assets as collateral to maximize your borrowing capacity with asset-based lending, it’s usually not required for equipment financing. Instead, the equipment your company is purchasing can serve as the collateral, where the lender can repossess the equipment if you default on the loan.
There is a common belief that financing is too much of a headache, that you have to spend hours filling out paperwork and there’s no flexibility. However, this process does not have to be difficult if you work with the right financing partner. They can help you to understand your options and simplify the process so that you can focus on growing your business.
It’s important to find a specialist who can help you debunk these equipment financing myths and help you along the way. When you are searching for the right financial partner to help you finance new or used equipment, contact us. Our team is ready to help.