Obtaining the equipment needed to stay ahead of the competition is an aspect of business that all owners will deal with at one time or another. Expanding your current operation may have been a thought in the back of your head, but you lacked enough capital to make it a reality. Small business owners will sometimes need to look for help outside the location.
There are a few options available for you to finance equipment. If you have a partner or family member that can float you a loan, then go for it. Otherwise, you will need to contact a lender that can work with you.
Here are a couple options that you will need to know before you sign on the dotted line.
- Term Loan-This option gives you a lump sum that you will have to pay back over a set amount of time. Each lender will offer you different amounts at various levels of interest. The main benefit of this financing option is that you can borrow enough money to get the equipment that you need, with some extra to pay for installation and training. Or some extra cash to launch a marketing campaign based upon the new equipment that you will be using. You will need to get an equipment finance plan that gives you what you need, at the lowest interest rate possible. Use an online platform to compare your options and go from there.
- Equipment Loan-A specialized loan meant exclusively to gain new equipment is your second option. It is like the one above except that the lump sum of cash that you get will only be enough to get you the machines or devices that you need. It will be a loan that is a set amount, based on the equipment that you plan to buy, and will have a monthly payment due for a specific amount of time. And of course, will have interest attached to it. Once again, make sure to check around for the best offer at the best cost.
- Line of Credit-Instead of getting a cash lump sum to purchase the equipment, some companies will allow you to get in store credit for which you can apply. This works on the same premise as a loan from a lender, but you remove the middle person. It will give you the equipment with the understanding that you will make monthly payments to the business that you are getting the items from, along with interest. A contract will need to be signed, as with the two options above.
- Business Credit Card-This is aways a viable option for you. A business credit card will not only give you the ability to purchase your equipment but will give you the option to pay the minimum amounts due during the months that you are down in profits. It is never a good idea to pay the lowest amount needed, but sometimes you may need that choice. Just remember that credit cards charge you a high rate of interest. The faster that you pay the balance off, the less money you will end up paying overall.
Obtaining equipment may be a challenging task to accomplish at times. The best way to approach it is to stop and sit down for a minute. Analyze your needs and make sure that you go with the best route available to you. Even if your credit rating is not great, or you are just starting up, so you have no proof of income, there are options open. Use an online platform to help you find the best fit for you and your specific business.