How Equipment Financing Can Benefit Your Small Business

Regardless of the type of business you have, you probably need at least some type of equipment to keep it running smoothly and to remain competitive in your specific market. While acquiring business equipment can be extremely costly depending on the type of equipment involved, with the right kind of equipment financing, you can avoid crippling your business with costly payments or deposits. Here’s how equipment financing can help your business.

What equipment financing is

Equipment financing is used when you intend to purchase your equipment and retain ownership throughout the life of the payments and afterward. In some cases, the equipment itself serves as collateral, and in other cases, a lender may ask that some of your business assets be provided as collateral in the event of payment defaults.

When you’ve decided on a strategy for equipment financing, there are several different ways you can go about it, and the one you choose will depend on your specific business circumstances, and what fits best for you. Here are some of the options you might pursue:

  • Equipment loan – this is the traditional equipment financing option, wherein the equipment itself serves as collateral for the loan, and you can generally get up to 100% financing
  • Term loans – these can be secured or unsecured, and are used when you don’t want the equipment to serve as collateral, but would prefer to use another business asset instead
  • SBA CDC/504 loans – these loans are available from the SBA, and are used to cover business equipment purchases up to a value of $5.5 million
  • Small business line of credit – this is an option for businesses which require flexible funding and the capability for making an immediate purchase. It’s very similar to a homeowner’s home-equity line of credit
  • Business credit card – this is a good option for business owners who wish to earn a return in the form of some kind of reward when making smaller equipment purchases, although business credit cards generally have the lowest credit ceilings, and must be used for smaller purchases.

Finance equipment through Commercial Capital Lending

If you need to acquire critical equipment to help your business grow or compete in your market, we may be able to help you through equipment financing. Contact us at Commercial Capital Lending so we can explore the options possible for providing the equipment financing you need for your continued success as a small business.

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