by Gerri Detweiler
If you need to purchase business equipment, consider equipment financing. Business equipment are a pretty broad term but they cover equipment ranging from an espresso machine for a coffee shop to specialized machinery for manufacturing. Usually the equipment vendors work with lenders for financing with the APR ranging from 8-25% depending on your credit score, your industry and the resale value of the equipment. You can either lease the equipment, buy the equipment with a loan, or do a sale-and-leaseback transaction (sell the equipment to a lender for some cash upfront and lease the equipment back).
Nav is the ONLY source for both personal and business credit access. See advice on how to build your business credit, get funding and save money. Get Started For Free
What You Need to Know About Equipment Financing
|Relatively low APR||Can require high down payment|
|Predictable monthly payments||Requires strong credit for good terms|
|Helps build business credit||Financed equipment can become outdated, but you are stuck with it at the end of your payment term.|
|Equipment serves as strong collateral|
Best Uses for Equipment Financing:
- Businesses in need of equipment
- Businesses in need of working capital that have equipment
Overall, equipment financing is fairly accessible to business owners as the collateral is pretty strong. If you intend to own the equipment for a long time, shop for financing partners. It can be your bank, alternative lenders, lenders who specialize in equipment financing or lenders who work with the vendor. Find the lowest cost option with best terms. You can save a lot of money on this.
Equipment Financing Offers
Instantly see your top options for business loans and credit cards based your business's needs using Nav's MatchFactor technology. See my match scores for free.
Rate This Article
Have at it! We'd love to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and protect yourself. Refrain from posting overtly promotional content, and avoid disclosing personal information such as bank account or phone numbers.
Reviews Disclosure: The responses below are not provided or commissioned by the credit card, financing and service companies that appear on this site. Responses have not been reviewed, approved or otherwise endorsed by the credit card, financing and service companies and it is not their responsibility to ensure all posts and/or questions are answered.