Business Equipment Financing - Your Elegant Bar

What is Equipment
Financing?

Equipment financing is used specifically for any type of equipment purchases – like power tools, heavy equipment, company vehicles or even safety gear. Getting an equipment loan is usually the easiest way to purchase new equipment for your business.

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Up to 100% of Equipment Value

Maximum Loan Amount

1 - 5 Year

Loan Term

8 to 30%

Average Interest Rate

As fast as 30 seconds 

Speed

How Does Equipment Financing Work?

Making large purchases of vital equipment is unavoidable for most businesses, new or old. New equipment can help your business to bring in more revenue – whether it be a van to help deliver catering or another oven to meet higher demand. Handing over the cash for these purchases can set you back a significant amount, and that’s what makes equipment financing an attractive option for expanding, starting or updating a business. 

Pros of Equipment Financing

Fast access to cash

Limited paperwork 

The equipment serves as collateral

Cons of Equipment Financing

The equipment could be outdated or unneeded by the time it’s paid off 

Depreciation of equipment means you can’t deduct the full cost each year 

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Most Customers who were approved had: 

$0k

ANNUAL REVENUE

450

CREDIT SCORE

0+

MONTHS IN BUSINESS

How Do You Apply Equipment Financing? 

Like most loans, you’ll need to provide the financial health of your business along with your credit score. Most equipment lenders will also ask for information about the equipment you’re looking to buy and a quote of how much it will cost. 

What You’re Going to Need:

Driver’s License 

Business Tax Returns(for loans above $150k)

Voided Business Check

Credit Score 

Bank Statements(for those lacking credit) 

Equipment Price Quote 

Who Qualifies for Equipment Financing?

Most businesses in good standing can qualify for equipment financing loans. It can actually be a good option if your credit score is on the lower end because the equipment you’re financing acts as the collateral. The details of how much and for how long depends on the type of equipment and how much it costs. 

Lenders are interested in securing a loan, so when you’re financing equipment, they’re often not as concerned with your borrowing history because the equipment acts as collateral. 

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What else should you know about Equipment Financing?

Like most loans, you’ll need to provide the financial health of your business along with your credit score. Most equipment lenders will also ask for information about the equipment you’re looking to buy and a quote of how much it will cost. 

When your business doesn’t have enough cash to purchase a new piece of equipment upfront, equipment loans are the best option. 

You use them the same way an individual would use a car loan, and then pay them back via monthly payments. 

How much you can borrow depends on what you’re looking to finance, and the price will dictate the terms and interest of the loan. 

The equipment itself acts as collateral, so you won’t need to put up additional collateral to secure the loan. This self-secured loan is often easier for some businesses to qualify for. 

How Long Does Equipment Financing Last? 

Like most loans, you’ll need to provide the financial health of your business along with your credit score. Most equipment lenders will also ask for information about the equipment you’re looking to buy and a quote of how much it will cost. 

Difference Between Equipment Financing and Equipment Leasing 

Business lines of credit traditionally have lower interest rates and closing costs, but have pretty strict repercussions if you exceed your limit or miss a payment. Traditional loans are usually used for one time, specific, larger purchases, while lines of credit are best for repeated spending or cash flow. This doesn’t mean you can’t make large purchases with a line of credit, but often, traditional loans are better suited for these types of expenditures.

Different Types of Business Lines of Credit 

Some equipment sellers offer the option to lend equipment directly to their customers and charge a monthly rental fee, much like renting an apartment. With this option, you can only use the equipment while you’re paying for it. If you chose to finance equipment with a loan, you’ll own the equipment when you’re done paying for it. If you know your business will need the equipment for a while, financing with a loan is usually a better investment.

Not sure if Equipment Financing is right for you? 

Let us walk you through your options and help you decide which program is right for you. 

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