Pros and Cons of Business Equipment Financing
Updated June 2018
Many companies, small businesses, in particular, have financial difficulty when it comes to investing in new and improved equipment. This is a major dilemma when the old equipment is holding you back from improving your process, efficiency, or expanding and taking on more clients.
If you need assistance with business equipment financing, click here. It will provide you with this needed liquidity, and utilizing WCM, a private loan provider, you could be funded in as little as five days.
Business Equipment Financing
What exactly is an equipment loan? It’s exactly what it sounds like – a loan provided specifically for purchasing, replacing, or repairing equipment for a business to process or manufacture their product(s). This can range to many industries from industrial equipment, computers, furniture, tools, restaurant ovens, medical equipment, company cars, and more.
Pros
- Quick approval and thus quick access to cash
- Limited paperwork
- Equipment serves as collateral
- Tax deductible
- Helps maintain your working capital for other purchases
Cons
- If equipment needs to be depreciated, you cannot deduct the full cost each year
- Equipment might be obsolete by the time the loan is repaid
This type of financing can be used for nearly anything, from cars to computers. The terms and rates will depend on the price of the equipment and the condition used vs new.
Term Length of an Equipment Loan
This depends on what type of equipment you’re financing, and its anticipated lifetime. The lender often prefers not to extend past this lifespan, as they’re trying to help you add value to your business.
What About Equipment Leasing?
In some circumstances a piece of equipment that will only be used for a short while, or is only needed once every so often, leasing might be more financially suitable, especially if it might require more maintenance than it’s really worth. Take, for example, a corporate jet. For some companies, it makes sense to own their own if they’re using it every week, whereas if it’s needed only a few times a year, leasing, time-sharing, or even chartering might make more financial sense.
It’s up to you as a business owner to do your numbers and decide if that investment really will take you to the next level. And if the numbers say “yes, yes, YES!” contact Worldwide Capital Management to help you fund your next business investment, and we’ll answer any questions you may have. We can fund anywhere from $5,000 to $500,000 for equipment. Fill out this simple application and if you’re approved you can be funded in as little as 5 days!
