Many businesses experience financial hardships when it comes to purchasing the right equipment for expanding the business. Although having the right equipment is essential for a business to grow, the finance required to buy those equipment is often a problem for many. That’s where equipment financing comes in. Equipment financing enables business owners to get the financial flexibility by spreading the total amount of the equipment over several months rather than paying all at once. Equipment financing further helps you avoid any type of uncertainties that may arise due to poor functioning of the equipment. It enables you to focus on using the equipment and grow your business. Here are some more reasons why you should opt for equipment financing.
The major benefit of equipment financing is that it enables businesses to take advantage of the latest technology by allowing them to buy the most advanced machinery, tools and materials without spending a large upfront cost. High cost is one of the main concerns that prevent businesses from buying state-of-the-art equipment. Such equipment are not cheap, and not all businesses can afford to buy them. Thus, equipment financing offers an option to acquire new machinery without blowing your working capital.
Another advantage of equipment financing is that it allows you to get a competitive edge over your competitors. With easy financing options, you can purchase new equipment that can bring more value to your brand, along with more customer reach, sales and profit. New equipment can offer new business opportunities, expand customer base and generate more revenue, which would be difficult to achieve if you are operating outdated equipment. Not purchasing the latest equipment could lead to losing customers and damage brand value.
Equipment financing also enables businesses to increase working capital as they can spread the cost rather than paying a large amount upfront. It is very common for business owners to experience cash flow shortages at some point. But, by opting for equipment financing, businesses can free up working capital for other expenses. It helps in maintaining steady cash flow and offers better certainty in budgeting by fixing customized monthly payments that match your business cash flow.
Applying for equipment financing is pretty easy and fast. The application process is simple and you can get access to the funds faster than traditional financing solution. In fact, a $200,000 is considered a small ticket application which can be completed in less than a day or two. However, one should note that the speed of the process is greatly dependent on the type and value of the equipment as well as the lender you choose.
Another notable benefit of equipment financing is that it frees off other lines of credit. Rather than using the business term loan to buy new machinery, businesses that utilize equipment financing can still have other credit lines open. For instance, if you apply for the standard business term loan for buying new equipment, you might run into working capital shortage. But, if you apply for equipment finance to purchase a large piece of equipment, you can still apply for business term loan if you run into working capital shortage.
It can be very frustrating to spend a large amount of money on equipment just to discover that it may soon be obsolete. With equipment financing, businesses can obtain equipment on lease, especially those that need regular update. This enables businesses to utilize the latest equipment, and easily upgrade to advance equipment when needed. Moreover, it allows business owners to test new equipment without having to own it completely. At the end of the term, if they decide to go another way, they are free to look for other options.
These are just a few of the many benefits of equipment financing and leasing. Equipment financing has become very common in the US, and many businesses have already started leveraging it in order to expand their business and stay ahead of their competitors. If you are looking for a trusted equipment finance partner, contact BizFi today and we are happy to help you elevate your business to new heights.