Our goal at Lending Valley is to provide all small business owners access to the best loans possible for their business. You can rest assured we will get you the best rates in the market!
Every small business needs a wide range of equipment to be able to offer their products and services to their customers. Sourcing and maintaining this varied equipment is no easy task, though, and if small businesses find that their equipment is damaged they’ll have to quickly find a replacement.
Lots of small business owners spend their time putting out fires and balancing the books in their business, so they may find that it’s often complicated to respond to those emergencies. If they lack the capital to purchase new equipment, they will often choose to turn to equipment financing options.
Here’s a closer look at why equipment is so important to many businesses, the most common types of equipment that are financed, and the mechanics of financing options.
Every small business works to deliver a quality product or service to a range of customers. In that spirit, those businesses will often rely upon a range of general and specific equipment.
To get the best results, it’s critical that equipment is kept in the best shape possible and that it functions as expected. Equipment counts as assets for businesses and they can often be used as collateral against a loan, so it’s important that a close eye is kept on equipment at all times.
Naturally, the equipment used the most by a small business will vary according to the niche and priorities of that business – as well as a range of other factors. To give you an idea of the type of equipment that can be acquired using equipment financing, here’s a closer look at some examples.
Small businesses that work in manufacturing and logistics will often have a range of specialist mechanical equipment. This could include complex conveyor belt systems, workbenches, tools, forklifts, and much more.
This equipment is naturally very expensive and very complex, so businesses should make sure that they keep it in the best condition possible. It’s also important that those businesses try to find the best financing options possible, given that these are big ticket items that may take a while to fully pay off.
Most small businesses will use a wide range of equipment on their business premises such as solar panels and air conditioning units. These are often critical to the success of a business and they can help to drive future savings.
Given that these pieces of equipment represent a keen investment to help cut costs throughout the future, it’s important that businesses keep them in peak condition to continue extracting value from them.
Small businesses considering investing in these areas should be sure to balance the savings brought about by the equipment versus the interest rates that will be accrued from the business loan.
Many modern businesses find that they are unable to operate without the appropriate software and cloud services. These services become the backbone for many businesses, which is why it’s so important that small businesses are able to acquire the licenses that they need.
Some of these specialist tools can be incredibly expensive, though, so some small businesses may need to take out the small and fast business loans to get the licenses they require to start making money.
Many small businesses require a range of office furniture and equipment. This seems simple at first but as a small business continues to grow, the costs can quickly bloom out of control.
Every nascent business wants to expand to the extent that it can hire new staff, but this is very expensive. Aside from the headhunting and salary costs, new employees must also be given the relevant office furniture and equipment that they need.
If a small business expands rapidly, it may decide to take out equipment financing on these important items to get the ball rolling.
Aside from the typical office furniture like chairs and desks, small businesses must also offer a range of appliances to meet their legal obligations toward their employees. This will include things like refrigerators and coffee makers, as well as furniture and lighting.
This can become expensive and for many small business owners, these items often come as unexpected purchases that they did not budget for. This can often mean that they need to pursue equipment financing to get everything rolling.
Small businesses must be able to process payments from their customers and clients. This means that they require all of the infrastructure in that area too including tills and PDQ machines to process payments.
This equipment is very valuable and often expensive, so some businesses decide to take out equipment financing on those items. This means that the business can get up and running, making the money that they need to begin turning a profit.
Now that we have a better understanding of what exactly some small businesses might need in terms of equipment, let’s take a closer look at the factors that are most likely to affect the repayment rates.
– Interest Rates
Of course, the interest rate is going to be the most prominent factor when it comes to determining the repayment rate that a small business is quoted. it’s important that small businesses carefully balance the benefits of the equipment against the interest rate of a loan – the equipment should always bring more value than it costs.
– Loan Amounts
The amount of the loan will also naturally have an impact upon the repayment rates of a loan. Small businesses will find that the greater the amount they borrow, the more they will have to pay back each month. This means that those businesses considering investing in new equipment should really understand the terms of their loan and how they are going to repay it over the years.
– Terms
The terms of the loan will also shape the repayment rates. Small businesses can often compare lenders to make sure that they get the best possible terms on their loan. The terms of a loan can include things like the APR, how frequent the payments will be, and much more. Favorable terms have help small businesses to take control of their equipment.
– Collateral
Small businesses will often find that they have to provide collateral to guarantee the loan. This is often difficult for small businesses, so lenders have a range of alternatives including a personal liability clause. The collateral that you put against the loan will have an impact on the repayment rates that you receive.
Traditional lenders make it incredibly difficult and time-consuming to apply for equipment financing. Thankfully, a new generation of lenders have emerged in recent years. These lenders make it much easier and faster for small businesses to secure the equipment financing that they are looking for.
Small business owners will find that when compared to the past, it’s much faster to work with this new generation of lenders. The journey begins by visiting the website of those lenders and diligently browsing the service that is on offer.
The majority of those lenders will offer simple application forms, lots of guidance, and very fast turnaround times. This means that small business owners get the answers that they need as quickly as possible without any hassle.
We hope that you are able to secure the equipment financing that you need!
