Equipment Financing Tips
If your small business is considering financing equipment, weigh all the pros and cons of such a move so you’re not left with a number of financial surprises.
When looking into equipment financing and leasing, first determine what equipment you require, given the fact that the majority of finance companies have a variety of terms and rates for different kinds of equipment.
One of the decisions you will need to make is whether to buy new or used equipment.
With used equipment, you save money on the front end, however, a large number of equipment financing and leasing companies will decrease the financing term of any loan or lease. In the event that happens, your company’s end payment could be the same or even greater than if you buy new equipment.
After determining what equipment you require, do your research on the available financial suppliers to locate the best coverage and price.
When you receive a number of quotes, determine which provider best suits your needs as far as service and price.
When you’re ready to contact several financing companies, be prepared to hit them with a number of questions. Among them are:
- What will my projected monthly payment, term and upfront costs be to finance equipment?
- How long have you been in business and can you provide me with some references?
- How long can I expect to hear on whether or not I will be approved?
- Will you require me to come up with a commitment or application fee before a formal approval?
- Do you have your written approval letter?
- Were there any changes in the contract from what you agreed to?
- Are there potential late fees that I could be saddled with?
- If you’re going the lease route, what are the terms?