6 Myths About Equipment Financing
Without the right equipment, it would be impossible for your business to stay operational. Unfortunately, having access to the right machinery can be expensive. This is why many business owners explore their options with equipment financing. Even though many people use this option, there are still many myths circulating about the service. Look over these myths and learn the truth about this helpful service.
1. Age of Equipment
One of the biggest misconceptions about this option is that you are only able to purchase new, expensive pieces of machinery. While most people opt for newer models, you are free to use your funds to buy equipment that was previously owned. As long as the piece is a good fit for your needs, there are no restrictions on age.
2. Tax Considerations
Many business owners believe that they aren’t able to get funding to cover areas like taxes, titles, and licensing. This is largely because some lending institutions find including these areas to be too much of a burden. To get the best idea of how to use your funds for taxes, titles, and licensing, speak to an expert who can provide you with insight on the matter.
3. Putting Money Down
Loans can be tricky. To take out some, it is expected that you will have a down payment. With equipment financing, however, you’re not held to the same standards. While a down payment can definitely help you create a more manageable repayment plan, it can also hold you back from using all the available capital you have toward your business. It isn’t required, but a down payment
4. Collateral
Similar to a down payment, many people also believe that collateral is required to see success with your application. If a lending institution requires collateral from you, then you should seek other options. The equipment involved in this type of transaction should be enough collateral for most establishments.
5. Documentation
While it is true that some lenders will require documentation from you like tax returns and bank statements, not all of them require extensive paperwork. There are some lenders who do one-page applications to keep the process simple.
6. Length
Finally, it doesn’t take long to know if you’ve been approved for equipment financing. Some establishments can provide you with notice in a few short hours. If time is a concern for you, then be sure to look for options that claim to keep the process moving along.
Knowing the ins and outs of how to apply for the right financing can be a lifesaver. Read up on how to get the most from your application and get started right away.
