How do you choose the right equipment finance for your business?

How do you choose the right equipment finance for your business?

Your business can become more profitable and productive with the right equipment. If you are looking to grow your business but don’t have enough cash flow, finance can be available. You can use business equipment financing to purchase new or used equipment and vehicles. This will allow you to preserve your working capital for other purposes, such as inventory and operating expenses.

For established businesses that want to finance the purchase:

>> Cars, utilities, and light commercial vehicles

>> Trucks and buses

>> Forklifts

>> Computer and office equipment

>> Medical, printing, and manufacturing equipment

>> Industrial plant equipment

How to Choose the Right Equipment Finance Agreement

There are many options for financing business equipment from lenders and credit providers. To run your business smoothly, you need to choose the best one. Below is a list of the different equipment and vehicle financing options available on the market.

Finance Lease This financing arrangement lets you use the equipment and vehicles, as well as the advantages of ownership. Actual ownership of the goods remains with the lender/credit provider.

Commercial Hire Buy – This financing arrangement allows the lender/credit provider to own the equipment or vehicles for the duration of the hire period (usually between two and five years). When you make the final payment, ownership automatically transfers to you.

Chattel mortgage – This is a great way to finance goods and services for your business. This loan agreement will allow you to borrow funds to purchase equipment and vehicles (chattel), and you will also be able to take over the ownership of the chattel at the time you purchase it. These benefits are offset by the fact that you will be able to provide security for the loan to the lender/creditor through a mortgage on the equipment or vehicles.

Equipment Rental This agreement is between you and the lender/credit providers. The lender/credit provider purchases the equipment/vehicles on your behalf and then rents them back to you for a set period (two to five year).

Looking for the right advice to obtain the right equipment finance

Your business’s financial stability is crucial. You could end up compromising your company’s financial stability if you select the wrong loan package. An expert commercial finance broker can help you avoid making such errors. A commercial finance broker is an expert in the requirements and credit policies for equipment financing. He/she can provide the best financial advice. Your accountant can help you understand the tax treatment and tax benefits that might be available to your business.

This is how to get the equipment financing you need for your business.