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How To Secure Equipment Financing Loans – Q & A

Welder using equipment purchased with an equipment financing loan

If you’re like most small business owners, you’re always on the lookout for opportunities to grow and improve your business. One way to do that is by acquiring new equipment. But before you can do that, you need to find the money to buy it. That’s where an equipment financing loan comes in. 

Getting an equipment loan can be a daunting task, but it doesn’t have to be. By asking yourself some key questions, you can make the process much easier. So if you’re thinking about applying for an equipment loan, read on for some tips that will help you get approved.

What is equipment financing?

Equipment financing is a great way to get the necessary machinery and equipment for your business with little money upfront and hassle. Financing equipment helps improve productivity and efficiency while not sacrificing too much cash flow.

What type of financing is the acquisition of equipment?

Equipment acquisition can be a relatively straightforward process if you know what type your company requires. Equipment financing lenders will lend based on the purchase price of the equipment and try to establish the term over the useful life of the equipment. The type of financing resembles term loans with a fixed interest rate and fixed payments over the term.

How does financing equipment work?

Equipment financing works similar to term business loans with regard to payment options. You pay fixed periodic payments (including principal and interest) every month until the principal balance is paid in full. In the end, the equipment is yours.

Is it hard to get equipment financing?

Getting equipment financing is easier than you might think. You’ll need to have been in business for at least a year, have a 600+ credit score, and have revenue of $250,000 or more per year before applying. Because the loan is collateralized with the equipment, this type of financing is easier to qualify for and cheaper than an unsecured business loan.

How hard is it to finance heavy equipment?

Financing heavy equipment is not complicated if you work with the right equipment financing company.

Many businesses look at their budgets and decide they can’t afford new machinery. But this might be a mistake! Many lenders will give money with interest rates as low as 3.5%. 

Can you get equipment financing with bad credit?

Equipment financing is complex for people with bad credit, but options are still available. A lease and loan can be an option if you’re willing to spend more money upfront or work together as part of a joint application process. In most cases, all you need is a 600+ credit score. That can include other borrowers who have better odds at getting approved by lenders than single applicants would otherwise have on their own.

How do you get approved for equipment financing?

An applicant will generally need decent personal credit (a FICO score of 600 or higher), 1+ years in business, and solid annual revenue of 250K+. Applying for and getting approved for equipment financing will be easier if you have those qualifications under your belt. There are a few different ways to go about it.

How do you finance capital equipment?

Financing options for your business are many and varied. The local bank is often an excellent place to start, but if not, there’s also the option of using loans like credit cards, lines of credit (LOCs), or term loans specifically designed to finance equipment purchases. 

What is needed for equipment financing?

To get the most competitive rates on equipment loans, you’ll need excellent credit and several years in business. However, some programs will get you financed with one year in business, a 600+ credit score, and at least 250K in annual revenue. 

How do you get a machine loan for a new business?

There are many ways to get a machine loan for a new business, but our online application form is the most straightforward. Fill out the personal and business information online. Upload bank statements and apply to see what you qualify for. Most programs require at least one year in business, though. 

What can you use an equipment loan for?

Equipment financing is a type of small business loan explicitly designed to purchase and install equipment for your business. You can use it to buy office furniture, medical devices, or farm machinery – anything that will help run your business smoothly!

What is the interest rate on equipment loans?

The interest rates start at 3.5%. You can get loans ranging from $5k to $5 million per piece of equipment with terms that go anywhere between one to six years!

How long does it take to get an equipment loan?

The equipment financing process is quick and easy. You can get a loan in as little as 3-10 business days after applying.

How many years can you finance heavy equipment?

In most cases, these loans last between one to six years. 

How long are equipment loans?

The average equipment loan term is 12 to 72 months. However, the length of your financing choice will depend on the type of equipment/industry, among many other factors such as interest rates and monthly payments your business can handle without interfering with cash flow.

Is equipment financing secured?

The process of getting an equipment loan is relatively easy, especially when you’re dealing with lenders who underwrite the application based on using the equipment you are purchasing as collateral. 

Should you finance equipment?

Equipment financing is a great way to get the tools your company needs without coming up with the entire cost of the equipment upfront. When you finance equipment, both short-term and long-term advantages exist, such as managing cash flow more easily or having access at any time for quick purchases in case of emergencies. 

We will help you grow your small business.

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