Equipment Financing

March 11, 2023 | Merchants | Dustin

For any business looking to scale operations and sales, equipment financing is a great way to increase revenue. Getting extra funds can be essential to businesses that must obtain, improve and replace machinery in order to keep their ventures running. This article will explain what exactly equipment financing is and how to get it for your business.

Equipment Financing Companies

There are many financing companies out there to choose from. But first, what exactly is equipment financing?

To start, it’s important to understand what happens when equipment financing companies lend money to entrepreneurs. When a business owner takes out a loan for equipment, they will need to make periodic payments. In addition, these monthly loan payments will include interest over a fixed term.

Lenders will, most of the time, require a lien on a loan. So, once the financing is completely paid off, the merchant owns the hardware and machinery. In the unfortunate circumstance that a business owner cannot pay off the money that was loaned out, the lender could repossess your business assets. On top of that, if you gave a personal guarantee, they can even take your personal assets.

Heavy Equipment Financing

From standard business equipment to specialized heavy equipment, there are options for financing. Even small construction businesses need assistance funding the purchase of new or used heavy equipment.

It’s no surprise to learn that heavy equipment such as forklifts, bulldozers, and tractors are very expensive. Because of these high costs of equipment, many times businesses resort to leasing options. In this scenario, the business is able to rent the heavy machinery over a set period of time. Although it is usually easier to get a lease for heavy equipment, obtaining financing in order to own the items once the final payment is made.

Restaurant Funding

It is well know that running a successful restaurant is hard work. Profit margins for restaurants can be as slim as 2% – 6%. Additionally, acquiring and maintaining equipment is time consuming and costly. That’s why equipment financing can be so useful for restaurants.

Regardless of the size of your restaurant business or equipment needs, carefully reviewing and understanding the loan terms to know the risks is essential. Restaurants need all sorts of equipment in order to make the food such as conventional ovens and refrigerators to frying machines and freezers. Also, restaurants must have dish ware and kitchen supplies such as plates, bowls, forks, spoons, and knives.

On top of all of these supplies, it’s important not to forget that all of those dishes must be washed and maintained. So, dish washers and washing sinks are a must. In addition, there are several considerations that must be made for maintaining safety standards and proper organization. Shelving, storage racks, and food prep counters are just the start of these practical and essential restaurant items.

Getting Financing for Startups

Small business loans are a great way to get equipment financing for startups. There are, of course, requirements in order to obtain financing. Personal and business credit scores will factor in greatly. On top of that, lenders may require a thorough business plan, cash flow statement or balance sheet to prove the long term plan and potential profits of the business.

Luckily, the experts at PayKings can help startups as well as established businesses to get financing for equipment. From getting required documents in order to submitting the applications, our experienced payment professionals can help set your business up for financial success.