Does your business need new equipment for powering the dynamic operational cycle? Maybe you need a brand new addition, or you want to upgrade your old one. Whatever the case might be, you will need the fortune to get that new equipment. Deciding to add another piece of equipment to your business is easy, but the real struggle begins when you have to pay for it. Now, there are several ways to arrange the needed finances. From Equipment Financing Companies to term loans, you can choose anything you like. However, financing equipment is a huge decision, and you should take time to assess your options before making a final choice. If you are thinking of financing equipment for your business, here are some top financing options to consider.
Term Loans
Term loans are the easiest way to finance your equipment. You will not have to worry about a third party and unauthorized lender, plus you will be building a strong credit score. Term loans are structured in a way that benefits both lenders and borrowers. In this option, you will take a loan for a fixed amount and promise to repay that amount to the lender within a predetermined period. You’ll do the payment in installments for a fixed amount. You will find a range of lenders and Equipment Financing Companiesoffering term loans. Since you can take out a loan for significant amounts, you can buy business equipment without emptying your pockets.
Equipment Loans
While the concept of both equipment and term loans is similar, equipment loans are specifically designed for business owners. Unlike term loans which are both secured and unsecured, an equipment loan will use the purchased equipment as collateral. This means until you pay the full amount and clear your loan, the equipment will remain in possession of the bank or the lender. The term or period of this loan is shorter than the life of the equipment. So, if you want to take this type of loan from banks or Equipment Financing Companies you will get a shorter period to completely pay the loan via installments.
Lease the Business Equipment
While buying equipment is the obvious solution to upgrade, you can also lease equipment to save money. In this process, you pay a lump sum amount to the leasing company and they will give you the equipment to use. In this period, the repairs will be made by the leasing company as well, and at the end of the lease term, you’ll have the option to buy the equipment at a lower price. However, when you lease equipment, you’ll not be the owner, and you will be required to hand it over at the end of the leasing term. Many companies offer equipment on lease, and if you want to upgrade equipment on a limited budget, this is a beneficial option for you.
Choose Equipment Financing Companies
If you plan to upgrade your equipment and you don’t have the best credit score to get loans from banks, there are Equipment Financing Companiesthat offer loans in the market. However, these companies will also check your background, business, and potential before rendering a loan, you will have a better chance of getting a loan from them with limited credit history. These companies will also keep something as collateral, and you may get the loan at a higher interest rate. You will also have to pay a monthly installment to these Equipment Financing Companies, but in exchange, you will get an expert partner in the equipment industry. Since these companies understand your business and its model, they only decide to assist you if they see the potential. So, they will advise you about the market and help you get maximum ROI from your equipment as well.
Business Credit Cards
A business credit card is not the solution if you want to buy new equipment. However, if you plan on upgrading a part of it and want a small amount of credit to cover a part of the cost, this option will be ideal for you. A business credit card is readily available and you can use it without any paperwork, given that your profile has been approved for the card.
Final Words
Upgrading a piece of equipment is not a simple task, you must do your research and choose the best option. While many banks and Equipment Financing Companies offer loans, you must find the one with the most benefits. Several companies offer machines on lease as well. If you are looking for a trusted partner, have a look at Kanoo Machinery. We offer a wide range of equipment and machinery in UAE and KSA especially in KSA we offer higher purchase scheme to choose from and you can even get them on lease. Browse our website to look at our collection and services or get in touch with our team for a specialized consultation at ccmachinery@kanoo.com.