Equipment Financing
What is Equipment Financing?
Equipment financing provides businesses with the capital needed to purchase or lease essential equipment without depleting cash reserves. The equipment itself serves as collateral, making this an accessible financing option for businesses of all sizes. Whether you need construction equipment, manufacturing machinery, vehicles, or technology infrastructure, equipment financing helps you acquire the tools necessary to grow your business.
Common Uses
Construction Equipment
Heavy machinery, excavators, bulldozers, and specialized construction tools
Commercial Vehicles
Trucks, vans, fleet vehicles, and specialized transportation equipment
Manufacturing Machinery
Production equipment, assembly lines, and industrial processing systems
Technology & IT Infrastructure
Servers, computers, software systems, and telecommunications equipment
Medical Equipment
Diagnostic machines, treatment devices, and healthcare technology
Restaurant & Hospitality
Commercial kitchen equipment, point-of-sale systems, and furnishings
Key Benefits
- •Preserve Working Capital: Finance equipment without depleting cash reserves needed for operations
- •Tax Advantages: Potential tax deductions on equipment financing payments and depreciation
- •Fixed Payments: Predictable monthly payments make budgeting easier
- •Equipment as Collateral: The equipment itself secures the loan, often requiring less additional collateral
- •Flexible Terms: Terms typically align with the useful life of the equipment
How Equipment Financing Is Evaluated
Equipment financing applications are evaluated based on both the business's financial health and the equipment's value. Key factors include:
- •Equipment Value: Type, condition, and resale value of the equipment being financed
- •Business Cash Flow: Ability to make monthly payments based on revenue and profitability
- •Time in Business: Operating history and stability of the business
- •Credit Profile: Business and personal credit history
- •Down Payment: Amount of equity the business is investing in the equipment
Business Lines of Credit
What is a Business Line of Credit?
A business line of credit provides flexible, revolving access to capital that can be drawn upon as needed. Similar to a credit card but with higher limits and better terms, a line of credit allows businesses to borrow funds up to a predetermined limit, repay them, and borrow again. This financing solution is ideal for managing cash flow fluctuations, covering unexpected expenses, or seizing time-sensitive opportunities.
Common Uses
Cash Flow Management
Bridge gaps between accounts receivable and payable, smooth seasonal fluctuations
Inventory Purchases
Stock up on inventory before peak seasons or take advantage of bulk discounts
Emergency Expenses
Cover unexpected repairs, equipment failures, or urgent operational needs
Growth Opportunities
Quickly fund new contracts, expansion projects, or strategic investments
Marketing Campaigns
Finance advertising, promotions, and business development initiatives
Payroll & Operations
Ensure consistent payroll and operational expenses during revenue fluctuations
Key Benefits
- •Revolving Credit: Borrow, repay, and borrow again up to your credit limit
- •Pay Interest Only on What You Use: Only pay interest on the amount you've drawn, not the entire credit line
- •Quick Access to Funds: Draw funds immediately when opportunities or needs arise
- •Flexible Use: Use funds for any legitimate business purpose without restrictions
- •Build Business Credit: Responsible use and repayment help establish and improve business credit
How Business Lines of Credit Are Evaluated
Business lines of credit are evaluated based on the business's financial strength and creditworthiness. Key factors include:
- •Revenue & Cash Flow: Consistent revenue and positive cash flow demonstrate repayment ability
- •Business Credit Score: Strong business credit history increases approval odds and better terms
- •Time in Business: Established businesses with operating history are preferred
- •Personal Credit: Owner's personal credit may be considered, especially for newer businesses
- •Collateral: Some lines of credit may be secured by business assets or personal guarantees