Equipment Finance – What you need to know

Businesses of all shapes and sizes, operating in all industries and fields, tend to engage with equipment financing at some point or another. There’s no one set type of equipment financing, so it’s important that you know your options before making a financial commitment. This will help you to get the best agreement to suit you and your business’ needs. Here’s some further information that will help you to achieve this!

What Is Business Equipment Financing?

If you need equipment to grow your business, but don’t have the money available to pay for it outright, or would like to pay for it in smaller installments, business equipment financing is the service for you. Business equipment financing will see a lender provide you with the funds to buy things like heavy machinery, vehicles, computers or any other expensive equipment that your business can use to grow and generate more profit whilst spreading the cost.

You will essentially draw up an agreement with a business finance lender, they will purchase the equipment you need or provide you with the money to buy the equipment you need and you will then pay them back in regular agreed instalments over a period of time.

This is a good way for startups to buy their first equipment, or for more established businesses to keep up with technological advancements and developments that render older equipment useless and new equipment essential.

What Are the Most Viable Options to Finance Equipment?

There are a number of ways to finance equipment that you might want to take into consideration before taking out any agreements. Some of the most popular include:

  • Business equipment loans – these tend to be best for small and medium sized businesses who are looking for a simple and straightforward way to get their hands on the equipment they need.
  • Hire purchase – this agreement will see the lender own the equipment for the duration of your agreement, where you pay fixed regular sums. At the end of the agreement, you will have the option to buy the equipment outright with a final lump sum payment.
  • Operating lease – if you only need use of a specific piece of equipment in the short term and aren’t interested in buying it outright, operating leasing can be for you. You pay a set sum for short term use of the equipment you require.
  • Business credit card – some businesses will purchase equipment on a business credit card and pay the balance off in instalments.

What is a Business Equipment Loan?

You may have noticed that business equipment loans featured top of our list of finance options. While this list was in no particular order, many businesses greatly benefit from business equipment loans. This is an unsecured finance option that can help you to get the expensive equipment that you may need. You will take out the loan, can put in an order for the equipment that you need straight away and simply pay back the full sum plus interest in agreed regular instalments. It’s as simple as that!

What Are the Benefits of Business Equipment Financing?

There are a number of benefits that come hand in hand with business equipment financing. Here are some of the best!

  • You get the equipment quickly – you could save for the equipment you need. But for more expensive assets, this could mean saving for a very long time when your business needs the equipment now. When you finance your equipment, you get use of the equipment straight away and can simply pay back the sum over time.
  • You can get quality equipment – if you don’t have to worry about the immediate costs of equipment you need, you have the option of choosing better quality equipment that will do the job you need it to do at a higher standard. This can increase productivity and profits.

How Can I Get Business Equipment Financing?

For business equipment financing, simply get in touch with us! One of our friendly and helpful consultants will be able to discuss your needs and requirements, assess your business and will be able to let you know your options. You can then go through these and pick the best for you!

There may well be a lot of information to take in when it comes to equipment financing. But hopefully, the above information has helped you to get to grips with the basics and can guide you towards the best equipment financing options for your business’ needs and requirements, helping to make your company more profitable in the long run.

Benefits:

  • Tax Efficient
  • Fixed Payments
  • Easy Budgeting
  • 1-5 Year Terms
  • Borrow from £10k – £5m

What Can Be Refinanced?

In a nutshell, anything. But critically lenders place equipment into two different categories – Hard Asset and Soft Asset. Hard assets can be refinanced at slightly cheaper rates than soft assets, mainly given that hard assets have a much higher resale value and soft assets do not. Which of course in the event of default is important to a lender. For soft asset refinance, the equipment must have been purchase inside the preceding 12 Months and copies of purchase invoices will be required to evidence this.

Hard Asset Examples: 

  • Commercial Vehicles
  • Manufacturing Equipment
  • Engineering Equipment
  • Heavy Construction and Plant
  • Agricultural Plant and Machinery

Soft Asset Examples: 

  • Audio Visual Equipment
  • Shopfitting
  • Beauty Equipment
  • Dental Equipment
  • Gym Equipment
  • Laundry Equipment
  • Waste Disposal Equipment
  • Furniture
  • Catering & Kitchen Equipment

The Process: 

  • Apply Online Here
  • Submit any Financial Info Requested inc Equipment Purchase Invoices
  • Get Approved
  • Get Funds!

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