Which are the best equipment financing packages?
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Equipment financing is a method of loaning used by businesses to purchase Operating Equipment. These equipments are then served as Collateral to the lender. Typically, in best interests of the lender, the amount financed cannot exceed the collateral value.
The process is simple. E.g. You apply to a bank/lender for financing of your Fixed Equipment. The bank/lender will issue a loan (LTV ranging: 80% - 100%) to you for the financing of your Fixed Equipment. You are then liable to pay the bank monthly annuities in partial portions of your principal, along with the interests charged. In the case of failure to pay, the bank has a claim on your Fixed Equipment.
Typical Advantages of Equipment Financing:
- In contrast to traditional lenders, you may be able to arrange 100% financing of your equipment with no down payment. This is a key advantage to you if cash flow is a concern to your business.
- Equipment financing is a source of funding that lets you hold onto your cash, or working capital, so it can be used for other areas of your business, such as expansion, improvements, marketing or C10&D.
- Equipment Financing often enables you to acquire better and more advanced equipment than you could have without financing. Certain Equipment Financing terms can also allow for technology upgrades or replacements within the term of the contract.