Entrepreneur’s Guide to Equipment Financing for Small Business Ops
Equipment is an absolutely essential part of every business. Whether you are manufacturing on-site, or you simply need the right technology to help your business grow, there are a number of financing options available to you. Understanding these can help you to get the best value for your money and to understand your options for your future equipment needs.
Standard Equipment Loans
These are a great no hassle option for equipment financing. The equipment acts as its own collateral, and you make a monthly payment towards the principal amount. You may have to have a down payment of up to 20%, but this goes a long way towards paying for the equipment itself. These types of loans are excellent for new businesses and for those who need to upgrade in order to make business growth possible.
Alternative Term Loans
Term loans facilitate equipment financing by allowing you to borrow a certain amount of money and paying this back in accordance with the finance terms. You’ll have a specific amount of time to pay that money back and you will more than likely be charged interest on the money. These are a good option for established businesses who need a financial boost in order to purchase new equipment or to expand their operations.
SBA 504 Loans
The Small Business Administration (SBA) 504 loan program allows small businesses worth less than $15 million and that generate less than $5 million a year in revenue to borrow money based on their needs. This is an excellent loan for smaller companies needing a source of cash comparable to the type of equipment that they need.
Lines of Credit
Banks will often extend a line of revolving credit to small businesses when they have of proof of recurring income and have been functioning for a period of two years. These qualifications may be relaxed or more stringent in certain situations. This can be an excellent option for more established businesses and for those who need to pad their cash flow in order to apply their revenue to equipment purchases and other investments.
Actual Credit Cards
There are a number of banks, credit unions and credit card companies who will issue a credit card specifically designed for small businesses. These can be dependent on your credit score and on your average revenue over a certain period of time. It can be difficult to get a credit card with a limit high enough to cover equipment financing without an excellent financial record.
Contact Artemis Commercial Capital for more information on ways to meet all of your company’s financial needs.