As a small business owner, you know how important it is to have the right tools on hand. After all, your customers expect top-notch products and services, no matter what your industry. Sometimes, though, purchasing that equipment is prohibitively expensive. Fortunately, equipment financing is available to help you balance having state-of-the-art equipment with keeping your budget in check.

What Is Equipment Financing?

With equipment financing, one hundred percent of the cost of your new equipment is financed, meaning you have immediate use of the tools while paying for them over time. This is obviously a great benefit as it allows you to access the very best equipment without having put any money upfront. The new equipment serves as collateral to secure the loan. If you should default on the loan, the lender could repossess the equipment, so factoring this payment into your cash flow is vitally important.

How Does It Work?

While the specific terms of your equipment financing will depend on your lender and your personal situation, the process generally works the same. Once your loan is approved, you begin making regular payments, including interest, until it is paid off. At that time, the equipment is all yours.

The interest portion of each payment is likely tax-deductible, so be sure to consult with an accounting or tax professional for the best way to take advantage of this benefit.

What Types of Equipment Can I Finance?

The answer depends on the type of business you run. If you’re operating a restaurant, you can finance new ovens, ranges, and refrigerators. A landscaping business might need new riding mowers, trucks, and trailers. Generally, any equipment that is necessary for the optimal operation of your business could potentially be financed.

How Do I Quality for Equipment Financing?

The specifics will vary by lender, but generally you should be prepared to provide your personal credit score, a business plan that outlines your history and future plans for your company, as well as its annual revenue. You may also be asked to provide a cash flow statement showing the money coming in and going out. 

Equipment financing offers tremendous advantages for the small business owner, like acquiring the very best tools available. Get the equipment you need right now without the headache of tying up large amounts of capital upfront. You can build the business of your dreams while keeping a firm hold on your finances.