Construction and landscaping businesses of all sizes require heavy equipment for tasks that cannot be accomplished with hand-held implements. However, heavy equipment can be prohibitively expensive for smaller companies. Equipment financing provides options that make needed items affordable for small businesses, enabling them to continue to grow. Here is some important information about this method of funding.
The Basics of Equipment Financing
Heavy equipment financing involves obtaining a lease or a loan so that you can acquire the machinery you need to run your business. Not having to come up with the entire cost of the equipment upfront allows you to keep company cash flow strong and maintain reserves for emergencies.
How Equipment Financing Works
When you obtain a loan to buy needed equipment, you receive the funds to purchase the machinery and then pay back the lender in affordable monthly installments. Alternatively, leasing equipment means that in effect you borrow the machinery and make monthly rental payments for the term of the lease. Often, though, lenders offer you the option of buying the equipment instead of returning it when the period of the lease is up. You can negotiate with your lender to find the term that works best for your company for the repayment of a loan or the length of a lease.
The Benefits of Equipment Financing
Although a high credit rating is helpful when you obtain your equipment lease or loan. You can generally qualify for funding even with low or no credit. Equipment financing provides an opportunity to acquire all the machinery your company needs so that you can remain competitive in your field and even expand to take on other types of work. Once you have the equipment you require to do the job, you are on more of an equal footing with other larger companies and can take on work that was previously unavailable to you.
For more advice on how to grow your business with heavy equipment financing, get in touch with Hornet Capital Solutions.