Getting financing for heavy equipment can be a turning point for your business. With the right equipment, you can finish jobs more quickly and perform top-quality work. Your team can take on additional work and expand with new services. Of course, before you can take these steps, you need to qualify for the financing you prefer. How can you select the right type of equipment financing for your needs and meet the requirements?
Check the Details of Loans for Heavy Equipment
Not all loans for heavy machinery and construction equipment were made equal. True, they all have the purpose of helping you get the equipment you need, but the way they go about it is often different. Some loans require a large down payment. Others ask for additional collateral or another type of guarantee.
There are also options designed for startups or companies with credit problems. The interest rates and terms are different for all of these loans, so it pays to check carefully before signing anything.
Look for Customizable Financing
It’s a big advantage when you find a lender that works with you to customize equipment financing to your business. Simply put, this means the terms are carefully tweaked to fit your company’s cash flow and business model. This can help seasonal businesses and small businesses choose financing options that are more comfortable for operations.
There’s a give and take associated with customization. If you want lower interest rates or longer repayment terms, you either need a better credit score or a larger down payment. On the other hand, if you’re OK with a slightly higher interest rate in the long term, you may be able to get smaller monthly payments.
Be Confident and Have Numbers To Back Up Your Business Financials
Most lenders don’t require many financial documents for equipment financing, but that doesn’t mean you shouldn’t come prepared. When you have documents that show excellent cash flow or plenty of revenue, it can help you get better interest rates than you would otherwise. It’s smart to understand your company’s available assets, time in business, debt-to-income ratio, cash flow, and net working capital.
Trustworthy lenders don’t have problems with you asking questions. It’s completely understandable to want to know about all fees associated with your financing. Ask how much the total loan will be, how much you have to pay every month, and what happens if you miss a payment.
