Have you recently scaled up your construction business and can’t meet your client demands for lack of equipment? It’s challenging to deal with numerous orders whereas you were used to a few clients in a week? But do you recommend the clients to other contractors for lack of capital to buy equipment? If your business is doing well, there are several equipment loan options. Read on to learn how Hasanov equipment loan provider can help your construction company when scaling.
What Is an Equipment Loan?
Equipment loans are a great way to finance equipment purchases for businesses. This loan provides the funds necessary to purchase equipment from lenders.
To qualify for equipment financing, you need to have some collateral. This includes business income and a debt-to-income ratio that won’t exceed certain limits set by equipment lenders.
Benefits of Equipment Loans
Equipment financing is an essential tool for any construction business to have in its belt. However, many firms are unaware of their options. When it comes to working with equipment suppliers or lenders, increased productivity and efficiency should be your goal.
This article will outline six specific benefits that can come from choosing this form of financing. Here are common benefits of construction equipment financing:
Easily Acquire Essential Tools
With proper equipment financing, you’ll save time by not having to wait until you save up enough money before buying new machinery. Instead, set yourself up for future success by investing now rather than later.
Expand Quickly Without Losing Control Over Finances
If you’re looking to expand beyond the current capabilities of your business, equipment financing is the way to go. This option allows you to acquire additional tools and increase production without waiting until the company’s balance sheet shows positive results.
Smoothly Handle Fluctuations in Cash Flow
Cash flow is an inevitable part of doing business as a construction firm. Equipment financing allows for any short-term hiccups so that you can continue providing optimal service to clients.
You don’t have to put pressure on your capital for immediate expenses to get enough machines. You only have to wait until everything is paid in full before enjoying the benefits.
Unlock Tax Savings Through New Investments
Tax season is a time of great joy and celebration at most companies, but it doesn’t have to be if you use equipment financing.
Your business can financially benefit from this practice by applying for payments against taxable income that would otherwise not have been possible without it.
More Flexibility to Upgrade Equipment
Through equipment financing, firms can take advantage of the latest innovations. You don’t have to pay out of pocket or wait until your firm’s financial situation improves.
Through financing, you’ll make more intelligent choices that will benefit your business greatly tomorrow.
Peace of Mind With Fixed Payments
Last but not least, one of the greatest benefits you’ll gain from choosing this option is peace of mind. With fixed payments established beforehand and defined terms, you won’t have to worry about hidden fees or unwanted interest rates.
Lower Interest Rates
A company’s credit score goes a long way when it comes to the loan application process. The better your score, the lower your interest rate would be.
If you find a suitable financing offer that fits perfectly into your budget, there’s no reason for you not to pursue it further.
Approvals in Minutes
There’s no waiting involved when getting approved for an equipment loan. It takes a few minutes to apply online, and if your application is approved, you’ll receive funding for your new equipment within 24 hours.
Easy Application
Anyone with any business or non-profit organization qualifies for an equipment loan, and equipment lenders don’t require a minimum credit score.
Flexible Payment Terms
Business equipment finance options are flexible in that there are various equipment financing plans you can choose from, including making equipment loan payments monthly or just once.
Low-Interest Rates
Business equipment financing rates are low because they’re backed by equipment as collateral. They give borrowers access to the best business loans possible at affordable rates.
You can take out part of a machine loan at a time and pay interest only on that amount until it’s paid off. This type of equipment financing has many flexible options compared to traditional bank financing for construction company needs.
Loans or Leases?
You might be wondering if it’s better to apply for an equipment loan or a leasing agreement.
Equipment leasing is a popular way of acquiring equipment. It lets you avoid making large initial payments and only pay a fraction of the total equipment value each month.
Equipment lenders give you the machines in equipment leasing, allowing you to make lease payments over a certain period. At the end of the equipment lease term, you can return the devices or purchase them for a specific amount.
This is possible through a special buyout called a pre-determined buyout. Equipment loans aren’t always available in equipment leases.
Thus, if you need to finance equipment purchases, consider applying for an equipment loan instead of equipment leasing.
Remember, equipment loans provide financing options that could meet any equipment needs you have.
How Does Equipment Financing Work?
The process by which construction companies get equipment financing is fairly simple. It can’t be compared to going through a traditional bank for equipment funding.
For instance, equipment loans allow contractors to use their equipment as collateral for borrowing a larger percentage of the purchase price. This is more than they would if all they had were a signed equipment lease agreement.
In addition, equipment leasing companies will only work with businesses that have been in operation for at least one year.
Common Requirements for Equipment Loan Approval
As a construction company, whether it’s equipment loans or equipment leases, will suit you well if your construction company has the following:
An application for equipment funding
A credit score above 550
3 months bank statements showing an ability to pay the loan payment
If you meet these qualifications, there’s no reason why your construction company shouldn’t pursue equipment loans or leases. Now that you know how to finance heavy equipment, what are you waiting for!
Apply for Your Equipment Loan and Get Approved Instantly!
Are you a construction business that needs an equipment loan and doesn’t know where to start from? Don’t wait any further.
At Hasanov Capital, we’re dedicated to keeping your business afloat by providing you with equipment financing.
It doesn’t matter how long you’ve been in the business, because we’ll always support your business growth. Get in touch with us today for the equipment loan.
