Business loans for equipment are a fast and efficient way to finance business necessities such as machinery, vehicles or new computers. How much you can borrow, loan terms and the length of the loans depends on your credit history and the items you need to finance.
What is a Equipment Loan?
An equipment loan is similar to a personal car loan. The amount you can borrow depends on the value of the equipment, you receive a fixed interest rate, and the equipment is used as collateral for the loan.
What You Need to Know
Here are some important things that you need to know about business loans for equipment:
- You can finance between 80%-100% of the cost of the equipment
- You can use an equipment loan to purchase
- Heavy machinery
- Business vehicles
- Computers and other hardware
- Factory equipment
- Most business equipment
- Amount you can borrow depends on the type of equipment or if it is new or used
- Factors that affect approval for an equipment loan include
- Value of equipment
- Business history
- Credit rating
- Even if your credit is imperfect you can still qualify
- Length of the term will depend on the type of the equipment and its useful life
- Does cost more than purchasing equipment outright but spread cost out
A business loan for equipment may not be your best option for all purchases. Depending on the cost of the equipment, the interest rates you qualify for and the useful life of the equipment, you may be better off purchasing the equipment outright or using a business credit card. The best way to determine if a business equipment loan is in your best interest is to speak with a financing specialist.