Equipment Financing

Getting an equipment lease or financing can help you fund a variety of business needs. This easy equipment financing solution can be used for things like:

• Vehicles

• Heavy machinery

• Restaurant appliances

• Medical equipment

• Office furniture

• Technology systems

Regardless of your company’s industry, exploring your equipment finance options could help the success of your business. Plus, equipment lenders usually report to business credit. The more business credit you build the greater opportunity you have in the future to receive the best rates and terms for the money you receive and increase your businesses ability to receive future loans without a personal guarantee. So whether you are looking for manufacturing equipment financing, medical equipment financing, or anything in between give us a call today and we can help you get the equipment your business needs!

The largest difference between an equipment lease and a business equipment loan is that an equipment lease has a fixed term, in which you pay a monthly rental fee, with no prepay benefits, and an equipment loan can be paid off at any time with any remaining interest wiped clean. Equipment financing plays a key role in modernizing operations and keeping your business competitive and efficient. Technology advances quickly; keeping pace is vitally important. Financing allows your business to remain updated without incurring immediate financial strain; with proper equipment in hand your business can offer enhanced services or venture into new market segments to drive growth and profitability.

There are multiple structures available for equipment leasing including:

Equipment Financing Agreement: Fixed payments are made over a set term after which you own the equipment in full.

Fair Market Value: Fixed payments are made over a set term after which you can return the equipment, renew the lease or purchase the equipment at fair market value.

Purchase Upon Termination: Require the customer to purchase the equipment at the end of the lease term at a certain percentage of the original purchase price.

Equipment financing is a type of funding that gives you full ownership of the equipment. You’ll pay interest in addition to the principal balance, usually as a fixed monthly payment. But once your financing term is over, you own the equipment free and clear.

Choosing the best equipment financing option depends on the type of equipment you need, how long you expect to need it, and how frequently you plan to update those assets. You can also use a business equipment loan calculator to help you compare costs. Swift SBF specializes in small business equipment loans and we can get your business the equipment it needs!

One of the biggest advantages of equipment loans for small business owners is that it helps you grow your business with new equipment while spreading out the costs over time. Additionally, you often don’t need any collateral besides the asset itself. By integrating new equipment into your business, you could increase revenue and reach with your services.

A drawback is that funds can only be used for equipment and sometimes soft costs associated with the purchase, such as taxes or delivery fees. Other types of financing, such as a small business loan or business line of credit, have minimal restrictions on how you use the funding proceeds.

Pros of equipment financing:

• Scale your business

• Spread out large capital costs

• No additional collateral needed

• Equipment purchases may be eligible for a tax deduction

• Cons of equipment financing

Use restricted to equipment

Your equipment financing payments are determined by four things:

• Funded amount

• Interest rate

• Term

• Collateral

These factors can vary widely across industries and equipment types. That’s why we work with a variety of lenders who specialize in industry-specific small business loans, so we can help you find the best deal.

If math isn’t your thing, you can use our equipment financing calculator to figure out what kind of monthly payments you can afford.

Also consider both the short-term and long-term gains your new equipment will yield. To determine whether equipment financing is getting you some real bang for your buck in the short term, you should weigh the costs of your monthly payment against the benefits your new equipment will bring.

Here’s an example: if the 3-D printing equipment you’re financing costs you $600 in monthly payments but enables you to take on an extra $2,300 in monthly orders, then your cash flow increase considerably outweighs your costs and makes the financing worthwhile.

This same concept applies to the man-hours you’ll save by leveraging a software purchase to automate several hours of invoicing and payment processing, or being able to attract new business because your upgraded sorting equipment lets you offer significantly faster shipping times than your competitors.

To figure out whether you’ll also see a hearty long-term return on investment, consider the longevity of the equipment you’re financing. Equipment that only gives your business a minor lift and may be obsolete in a few years when you pay off your financed amount may not give you the long-term leg up that you’re looking for, whereas receiving a funded amount over a 4-year term on equipment that will last for several years beyond that could be a much better investment.

Qualifying for equipment loans for small business owners may actually be simpler than other business financing solutions because lenders use equipment as collateral. This provides lenders with greater security knowing there is tangible collateral - in this case the equipment itself - available if there is default or liquidation is necessary, meaning eligibility criteria tend to be more lenient compared with loans with no collateral attached.

Equipment financing doesn't only apply to startups or established businesses - it provides equipment financing solutions to any stage of lifecycle: whether your startup requires tools for kickstarting operations or your mature one needs to upgrade machinery, financing could be the perfect answer for securing equipment financing solutions.

Also consider the inherent value of equipment you wish to finance, since certain kinds due to their longevity or resale value may make securing financing simpler - for instance heavy machinery with long operating lifespan may seem less risky than technologies that might become outdated quickly.

Equipment financing's predictability makes it even more appealing; unlike some alternative financing options where costs and terms fluctuate over time, small business equipment loans typically feature fixed interest rates to ensure steady monthly payments that assist businesses in budgeting and financial planning.

Equipment financing stands out amongst financial products by its accessibility; with lenders and borrowers enjoying protection provided through its structure. As a result, approval processes tend to be relatively streamlined for this form of lending.

Equipment financing enables your business to expand without tapping your personal cash reserves for funding purposes, with easier qualification requirements thanks to physical collateral attached. Equipment finance has emerged as a critical tool in today's ever-evolving market dynamics: having modern machinery for production or software for IT services may not only keep them competitive but can dramatically boost productivity and efficiency as well.

But outright purchases of equipment can drain company liquidity quickly. That's where equipment financing becomes so valuable - enabling companies to acquire these tools without diversion from operations or growth opportunities, effectively modernizing without incurring significant financial strain.

Equipment financing provides businesses with an invaluable cash flow management advantage, enabling them to accurately predict their monthly financial commitments with fixed monthly payments - helping to maintain stable operations without guesswork involved and creating predictability in financial planning. This predictability provides businesses with crucial control of cash flows for planning purposes.

Due to an ever-evolving technological landscape, businesses that hesitate in upgrading or purchasing equipment could fall behind quickly. Equipment financing ensures they stay agile by swiftly adapting to industry advances. Finally, equipment financing provides an indirect boost for a company's image: operating modern equipment can create the perception that you are an industry leader, drawing both clients and talent from other disciplines into your fold.

Equipment financing is more than a financial tool - it's an enabler of growth, efficiency, and competitiveness in today's business environment.

It depends on your lender and funding/financing terms. However, most equipment finance terms range between 3 and 10 years in length.

To get equipment financing, you’ll typically need to meet the following requirements:

• At least 12 months in business

• $50,000 or more in annual revenue

• Credit score of 650 or higher

If your credit score is lower than 650 but you can show proof of solid cash flow and revenues for the past 3 to 6 months, you could still qualify.

And don’t worry if you don’t meet all of these requirements. Exact qualifications vary by lender and equipment type. The best way to figure out what you qualify for is to fill out our free 15-minute application or get in touch with one of our personal funding managers at (914) 623 8296.

No down payment or collateral? No problem. One of the big benefits of equipment financing is that your equipment can also act as your collateral, which means you can secure financing without draining the last of your liquid cash or risking your personal assets.

Your lender will determine how much you can finance by reviewing the type of equipment you’re buying, its lifetime value, and whether it’s new or used.

Because the collateral is literally part of your financing, it’s often not as difficult to get approved as many small business owners think it is. Getting started is easier than following those Ikea instructions: just fill out our application, then compare equipment financing options from our nationwide network of 75+ lenders.

Equipment financing has multiple effects on a business's credit score. Like with any form of lending, on time payments and regularity of repayment will boost it; missed or late payments could wreak havoc, potentially increasing costs or making future financing harder or costlier.

But there's more than meets the eye with business credit scores; having one plays an essential role in any company's financial journey and can open doors to better financing terms in future, increase borrowing capacity, or influence terms from suppliers or vendors.

Assuming and successfully managing equipment financing can send a powerful signal about the reliability and responsibility of your business to creditors - this can especially prove valuable when applied for by younger businesses that seek to establish solid credit histories.

As many equipment lenders actively report to business credit bureaus, equipment financing should be seen as more of a strategic decision than ever. Equipment loans not only allow you to access funds for immediate needs; they're also an opportunity to bolster and build your company credit profile over time - potentially leading to better interest rates, larger loan amounts and enhanced trust from potential business partners.

Equipment financing not only meets your immediate equipment requirements but can also play an integral part in shaping the financial health and standing of your business in its market landscape.