Introduction to Equipment Financing
Equipment financing is a smart way for businesses, big or small, to get the gear they need without breaking the bank. You can qualify for equipment financing at pre-revenue and post-revenue level of your business, regardless if you’re profitable or not. Think of like getting a loan but specifically for buying equipment, whether that’s a new oven for your bakery, a truck for your delivery service, or printer for your office. However, there are some caveats.
Key Benefits of Using a Equipment Leasing Broker
On equipment financing, it’s similar concept to any loans, but there’s tax implications that complicates it; therefore, working with professional is the best way to guide you through what’s best of your business. A equipment loan broker should know all the types of equipment financing that’s available to you based on your profile, and tax lease preferences.
Additionally, not every business is the same, so there’s no one-size fits all model for equipment financing. There’s so many nuances like business and personal credit, years in business, type of equipment and industry. All plays a factor.
For example, in boom and bust cycle, trucking industry as well as restaurants become risky for lenders so they either halt lending or tightened up. Industry that typically has short-live or don’t outlast the term of the lease or equipment financing agreement will have harder getting funding at a favorable rate.
However, it’s today’s world as long as you have revenue, you’re easily have access to funding of any type.
What Is a Equipment Loan Broker?
A lending broker acts as a middleman between you and the lenders. Think of them like your guide in the world of finance. They look at your needs, just like an insurance agent to assess your business funding situation, and then find the best loans for you, in this case, equipment financing. There are consultants and there are merchant cash advance brokers, but especially when it comes to equipment financing.
Equipment Loan Brokers have a wide network of lenders they work with, giving you access to a broader range of loan types options specifically to funds equipment loans. They know the ins and outs of the loan market. This means they can often negotiate better terms, rates, and conditions on loans that fit your specific needs. In short, an Equipment Loan Brokers can save you time, money, and a lot of headaches by guiding you through intricacies of making sure you get a deal that suits your business goal without you having to dive deep into the complex world of equipment finance yourself; while wasting your time and you end up with merchant cash advance that you regret later because you worked with the wrong broker.
Broker can help guide you through various equipment financing solutions.
Two primary options:
Equipment Finance Agreement (EFA) : This option will provide you lenders like national banks, private lenders and equipment vendor & dealers’ lenders who can offer you businesses equipment financing. These types of financing allow businesses to spread the cost of the equipment over time, making it more manageable to afford with equipment financing. On EFA, there’s no buy out or balloon payment. By definition, it’s not a lease. It’s a finance agreement with an inherent lease-like clauses.
Equipment Leasing: This second option is leasing equipment for your business. Leasing involves off-balance sheet financing in the form of Fair Market Value (FMV). During the lease term, the business pays regular payments to the leasing company. Payments is deducted 100%. At the end of the lease term, the business may have the option to purchase the equipment based on current fair market value. Or, return the equipment, or negotiate a new lease agreement for upgraded equipment.
The second equipment leasing option is Dollar Buyout Leases. (1 (dollar for some states and )101 for others)
Both financing and leasing options offer benefits such as preserving cash flow, avoiding large upfront costs, and providing flexibility in of consistently having an updated equipment. Additionally, financing and leasing solutions may include all soft-costs into the agreement like maintenance, installation, delivery and taxes if dollar buyout or EFA. It’s an inflation buster strategy.
Overall, equipment financing and leasing solutions from Liberty Capital Group, Inc. will enable you to have the right funding partner. Liberty Capital Group, Inc. has served small businesses for over 20 year.
Access to Multiple Lenders
When you go through a lending broker like Liberty Capital Group, Inc. for equipment financing, you’re tapping into a wide network of lenders. This isn’t about just knocking on one door; it’s about having that door open to a hallway of many doors, each leading to different lending options. The big win here? You get to compare. Imagine you’re shopping for the best pair of running shoes.
Most will say, “They only want to work with a Direct Lender.” Well, there’s good and bad to that idea. If you qualify for funding at your local bank, you should be shopping for financing in the first place. If you fit outside the bank tight credit window, you become non-bankable in a sense you can’t get a bank loan.
You can go shop yourself, then you end up with multiple inquiries because equipment financing is typically hard pull if you work with the lender directly and they turn you down you will have inquiry on your credit.
Customized Financing Solutions Based on Credit
Choosing a lending broker for equipment financing opens the door to personalized financing options. They typically, do a soft-inquiry to determine the best suited lender they will apply for you saving not just your time, theirs and their lenders.
This is the advantage of working with equipment loan broker. You can find a solution that fits exactly what your business needs. It’s like having a tailored suit versus buying one off the rack—the fit is just better. A broker takes into account your business’s financial health, how long you’ve been in operation, and future projections to secure terms that make sense for you. They can negotiate lower interest rates or more favorable repayment terms. Simply put, working with a broker can lead to a financing solution that’s as unique as your business.
Work with an equipment leasing broker who does soft inquiry so you can avoid multiple inquiries because if you work with a broker who doesn’t pull credit, they wouldn’t know where to submit your application so they just throw it against the wall and hope it will stick. They will shotgun your applications to multiple lenders regardless of their credit profile, thus creating unnecessary credit inquiries.
Expert Guidance Through the Equipment Financing Process
Equipment Leasing Brokers know the equipment financing world inside and out. They guide you through the process, making it easy for you. Brokers look at your business, understanding what you really need. They match you with the right loan and lender, one that fits your business like a glove. With a broker, you’re not just picking a loan; you’re making a smart choice for your business’s future. They help you understand the fine print, so there are no surprises. In short, brokers use their expertise to make sure you get the best deal, without the headache.
The terms “down payment” and “advance payment” are often used in financial transactions, but they refer to different concepts and serve different purposes. Here’s a breakdown of each term and how they differ:
Potential for Better Rates and Terms
When looking for equipment financing, one of the key benefits of working with a equipment leasing broker is the potential to get better rates and terms. Brokers have wide networks and know multiple lenders, which means they can shop around for you. They work on your behalf to find deals you might not find on your own. Because brokers have a good grip on the lending market, they can often negotiate lower interest rates or more favorable repayment terms. This can mean saving money over the life of your loan, making your financing more affordable in the long run. By comparing offers from various lenders, brokers ensure you’re getting a competitive deal tailored to your business needs.
Hassle-Free Application Process
When you go through a lending broker for equipment financing, you wave goodbye to piles of paperwork and confusing terms. Brokers simplify everything. They have the know-how to swiftly navigate through the application maze, making sure your application shines.
Conclusion: Streamlining Your Equipment Financing Journey
Working with a lending broker for equipment financing simplifies every step of securing funds. These professionals bring you closer to the right lenders, ensuring a match that aligns with your financial capacity and business needs. The journey with a broker means you don’t have to navigate the complex financing landscape alone. They guide you, translate the jargon into plain language, and help you avoid the pitfalls that could cost you time and money. Ultimately, using a lending broker can be a smart move, letting you focus on what you do best – running your business – while they handle the intricacies of financing. So, if you’re considering equipment financing, think about the streamlined experience a lending broker can offer. It’s a choice that could lead to better terms, a smoother process, and, potentially, more success for your business.