What is Equipment Financing?
A considerable number of businesses use equipment financing to replace, upgrade, or purchase new equipment while at the same time retaining cash flow and working capital. Getting an equipment loan involves a lender that is willing to finance from 80% to 100% of the equipment. The loan is self-secured, meaning that the piece of equipment or machinery works as collateral. As a result, lenders tend to offer lower interest rates with longer terms. How much you can borrow and the interest rate will depend on the value of the equipment you will buy and the strength of your loan application. Also, the term of the loan will not exceed the length of the useful lifetime of the financed equipment. With the capital that businesses borrow they can get everything from computers, trucks, ovens, desks, furniture, copiers, forklifts, farm machinery—without having to pay the full cost up-front.
Business owners are always looking for ways to better serve their customers. One of the best ways to improve your service is by getting the newest and most upgraded equipment. The only problem is that equipment and machinery can be very expensive. The equipment financing program from LFOA offers business owners a quick and affordable way to get new or used equipment to enhance their business’ productivity, effectiveness, and service.
Whether you’re a restaurant that needs new appliances or a construction company that works with heavy equipment. We can help you get the equipment NOW while preserving that much-needed working capital. At LFOA, we offer competitive commercial lending and equipment financing solutions that make your equipment acquisition a simple process.
Equipment Financing vs. Equipment Leasing
Often, new business owners use up the majority of their capital on equipment, not realizing that leasing is a cheaper alternative. Some business owners are only looking for a temporary solution, so they choose to lease instead of buying. Others lease the machinery because they don’t have the capital to buy it outright. When you lease a piece of machinery, you are renting it just like you would rent an apartment. That means that you will only be able to use the equipment while you’re paying for it.
The main advantages, of leasing the equipment, are that you don’t need to put any money down or collateral. On the other hand, leasing the equipment could end up being more expensive than just purchasing it outright. Do not deplete your business’ bank account, instead, partner with us and allow LFOA to finance your next piece of equipment.
Discover the tangible benefits of your new equipment purchase while maintaining guaranteed low payments through our programs.
Ask yourself these questions
When you decide that it is time to purchase equipment for your business, you should ask yourself three questions.
- What type of equipment do you need?
- How much is it going to cost?
- How are you going to pay for the equipment?