Using equipment financing to spread the cost of acquiring machines is the best way to make sure you have the capital to cover everything, so you’re not picking and choosing what services you can offer. It does not matter if it’s a first-time setup or an expansion and upgrade, financing deals let you get what you need and start making money with less skin in the game so you can reach a return faster.
1. Small Business Loans
Loans aimed at small businesses and backed by the SBA are a popular choice for qualifying companies because they mirror traditional bank loans in structure, but they are more accessible for small companies, and they have more generous terms than most comparable loans from traditional bank programs. In some cases, the SBA version of the loan has options for longer terms, in others there are interest savings for small companies that use this option.
2. Equipment Financing Loans
Whether you use a traditional bank program or go through a private lender with a more tailored approach to quoting loan deals, the term loan is one of the most popular ways to get new machines. Bank programs often focus on high-cost assets and multi-asset loans, much like the SBA’s flagship programs. Private lenders tend to focus on terms in the two-to-ten-year range, flexible down payments, and accessibility to all businesses. The flexibility and mid-length loan terms work well for machines that have a long life expectancy and a moderate cost.
3. Leasing Your Next Round of Equipment
Financing through loans is not your only set of choices. You can also use a lease agreement to access equipment, and there are several ways to set the lease up to work for your business’s specific situational needs.
- Control term lengths to upgrade on schedule and upgrade by leasing the next model
- Use lease-to-own agreements to acquire machines without taking on debt
- Lease machines for specific jobs or clients to avoid investing in a temporary need when you have a known project end date
It’s very easy to use leasing to control your costs and to make accessing equipment convenient at the same time. To top it off, leasing is a direct cost of doing business, so you can balance leasing and direct acquisition of your new equipment as needed to balance your tax exposure as your company grows. Keep that in mind when weighing the best choice for equipment financing for your current needs.
