The success of a business venture depends a lot on the functioning of its equipment. The right tools can make your business more productive and profitable. However, purchasing business equipment could be a costly affair. One way to arrange the required finance is by taking an equipment loan. This helps you conserve your working capital and use it to deal with other important business activities.
There are a number of banks and financial companies that provide equipment financing. However, you need to get the loan from the right company. There are many things to consider when choosing a lender.
How to Choose an Equipment Finance Provider
Equipment financing could be a great option for established companies that are looking for finances to buy computers or office equipment, industrial plant equipment, commercial vehicles, forklifts, manufacturing equipment, and others. Here are some major things to consider when choosing the right commercial equipment finance company.
· Loan amount and tenure – Some acclaimed companies enable you to borrow as much as 90 percent of the value of the equipment. This means that you can get the tool with minimum upfront investment. It is also important to consider the maximum time limit for repayment. Top companies will allow you repayment tenure of seven years or longer.
· Interest rates and processing fees – You should also be well informed about the rate of interest on the loan. Different banks and financial institutions charge different interest rates. Some banks even offer floating rates of interest. Also remember that there could be some loan processing fees and other hidden charges involved. It is always a good idea to opt for a company that offer both flat and fixed interest rate packages for loans.
· Equipment finance options – Some lenders offer different types of equipment financing options, so that the borrower can choose an option depending on his individual preference. Look for a lender that provides customer centred financing options, such as, commercial hire purchase and chattel mortgage. In case of the former, the lender owns the equipment during the hiring period. However, once you repay the total loan amount, the ownership of the equipment is automatically transferred to you. Some lenders even allow you to take out an all-risks insurance policy up to its prevailing market value.
Finally, you should read reviews of your chosen equipment financing company and visit the company’s website to know whether they provide flexible financial solutions to suit all your requirements.