What Is Equipment Financing?
Equipment financing is mainly for businesses that would benefit more from buying new equipment as opposed to leasing.
The terms are very similar to a traditional business term loan. Borrowers are given a lump sum that is repaid via monthly payments. In most cases, payments are fixed but much like are other small business loans, we regularly allow borrowers to make smaller or larger payments at certain points due to fluctuations in revenue or cash flow. The payment system you are initially recommended will likely depend on how the new piece of equipment will impact revenue and how much time will pass before that impact begins.
Businesses usually lease equipment if they cannot come up with the money to buy at that specific time. Traditional business lenders won’t approve business loans when revenue is down or stagnant but United Capital Source is fully capable of distributing equipment financing during temporary rough patches or slow seasons. We may even be able to structure your terms to that you make your largest payments when your new piece of equipment has begun to stabilize or increase revenue.
What Do I Need Equipment Financing For?
Unless your industry requires you to implement new technology on a cyclical basis, equipment financing is a more sensible option than leasing. Rather than having to renew a lease every year or so, the equipment would be yours to keep. Maintenance would be your responsibility, meaning you can repair it whenever you want and complete the maintenance on your schedule. Leasing requires you to rely on the leasing company for maintenance, which would give you little (if any) control over when the maintenance takes place and how long the process takes.
A big reason United Capital Source’s equipment financing is so accessible is fluctuations in price. The price of equipment changes based on the state of your industry. With equipment financing, you can purchase equipment when the market price is lower than usual, even during a financial pinch.
Many businesses also choose equipment financing primarily to maximize tax breaks. You should consult a tax professional before assuming any deduction applies to you but deductions are usually permitted for larger equipment purchases.
Let’s Start Our Partnership Today!
Putting off necessary expenses for things like equipment isn’t always the end of the world but it will certainly decrease profits little by little. United Capital Source can help you get the equipment you need while having as little impact on monthly cash flow as possible. Apply now to see how much you qualify for!