When you’re considering the possibility of financing equipment, there are some questions you should ask yourself to be sure that you’re going about it in the right way, and that you achieve the greatest value for your investment. Some of those questions are considered below, and these are points you should be aware of before financing equipment.
What Are Heavy Equipment Loans?
There are actually two options available to you which fall under the general category of heavy equipment loans, those being leasing and financing. When you’re leasing the heavy equipment, it’s not necessary to put down any advance money or to offer any collateral. You simply pay a monthly amount, and for that, you are allowed to use the equipment for a specific period of time.
Once the lease is over, you can either renew the lease, return the equipment, or purchase the equipment if you choose. With financing, you would have to borrow enough money to pay for the equipment outright, after which time you would then own that piece of machinery. You would still have to make monthly payments to your lender, but at the end of the loan, the equipment would be yours.
What Are the Qualifications for a Loan?
It’s usually easier to qualify for a heavy equipment loan than a traditional loan because the machinery itself serves as collateral. Generally speaking, if you have been in business for more than a year, and you have at least a decent credit rating, you should probably qualify for a heavy equipment loan.
Is It Possible to Get Heavy Equipment Loan with Bad Credit?
Yes, it is possible to get the loan you need even if you don’t have the best credit rating. However, you can expect to pay a higher interest rate, because any lender will want to protect themselves against the possibility of loan default.
Do You Need Capital for Financing Equipment?
Sometimes, having a major piece of equipment is all it takes to get your business to the next level. Contact us at Rotay Capital Finance if you are seeking financing to secure that all-important equipment which will help your business succeed.