When Small Businesses Can Use Equipment Financing
Are you looking for a way to kick your small business into gear so you can accelerate your company’s growth and reach all your goals? That’s the thrill of entrepreneurship, but it involves a careful balancing act as you build up momentum. One way that companies keep their overhead low so they can keep cash flowing and operations running is by using financing for major purchases.
Equipment financing, for example, allows you to get the machines you need to do your work while spacing out payment over a longer term. This makes it easier to reach a return on your investment that you can use to keep things growing.
What Kinds of Equipment Can Be Financed?
In theory, any equipment your company is buying to do business with can be financed, from copy machines and computers to fabrication equipment, extrusion presses, and other heavy machinery. Depending on the lender, some smaller pieces might not qualify for their minimum purchase size, because this kind of financing does use the equipment as collateral, so machines that depreciate too quickly or that don’t have high enough individual values need to be financed with another option like a business credit card.
When to Finance?
Realistically, any time an equipment purchase would use up a large chunk of your cash reserves, it’s a good idea to at least think about equipment financing. If your credit supports it and you have the cash to handle the down payment, it will allow you to manageably buy more equipment than you would otherwise be able to handle at once. This can be the key to buying the machine you really want to invest in, rather than the one that just gets you up and running, so it’s an opportunity to invest in easier maintenance and more reliable performance too.
What Kind of Financing?
Purchasing with a loan is one way to minimize your overhead with financing, but often it’s easier to lease. This allows you to fund access to the machine without the extra responsibilities involved with equipment ownership. That means you don’t have to worry about resale or disposal, and you can simply let your lease lapse when you’re ready to upgrade to a new model. This makes a lot of sense for companies that are starting with smaller capacity equipment who want to upgrade, as well as those using machines that have a short path to obsolescence.
If you’re looking for a way to access all the machines your company needs to get work done, you need to look at your equipment financing options today. There are many ways to structure the acquisition, so you’re almost sure to find one that works for you.