It’s not unusual for a small business to need a loan. Most business owners have plenty of equity in their companies. But at times, a business can also need an injection of working capital or MAY require a new asset.[2] Credit is a great way to achieve these objectives. For companies that specifically need fixed assets for their business, equipment leasing can be a great credit solution.[3] Equipment leasing is a great way for bakeries to acquire new ovens, for drivers to buy new trucks, and for dry cleaning establishments to buy new conveyors. Almost every type of business can use this kind of credit.
Equipment financing solves a lot of the problems that accompany traditional small business loans.[3] Traditional loans are only available for people seeking to purchase new equipment.[3] Equipment financing has no age limit as long as the equipment is in good working condition.[3] Traditional loans may require large down payments.[3] equipment financing requires no down payment.[3] Small business loans can impact a business owner’s personal credit.[3] Equipment financing only reports to the commercial credit bureau.[3]
There are also additional advantages when choosing to enter into an equipment lease. This type of financing offers terms 24 months through 60 months. Comparably speaking, a typical business loan’s terms are usually maxed out at 36 months.
Finally, with equipment financing, a business owns the equipment outright from the start.[1] This is a big advantage in terms of taxes. [1] Equipment financing can be a great way for small businesses to minimize costs at all phases of their life cycle.
References:
[1]https://www.nerdwallet.com/best/small-business/small-business-loans/equipment-financing-loans