Are you a business that needs to get your hands on some equipment that you cannot afford to buy outright? Are you looking for an equipment financing option instead? There are a variety of equipment financing offers out there, and by selecting the right one, you can make the right financial decision for your business. With that thought in mind, here are the most common types of equipment financing offers you are going to find:
- Dollar buy-out lease: This type of equipment financing offer allows you to lease the equipment out at high monthly payments. However, at the end of the lease agreement, you have the option of buying the equipment. This is perfect for equipment types that you will need for the long term, and you know will not lose value once the lease period has ended. Most money lenders will set the lease period for dollar buy outs to 24-72 months.
- Fair market value lease: For more flexibility, you could choose a fair market value lease, which provides various options at the end of the lease agreement. Most commonly, there are 3 different options: return the equipment, create another lease agreement, or simply buy the equipment at the market value. There are advantages to all three, and the one that you select will depend on your company finances and the type of equipment for which you need financing.
- Business expansion finance: If you need additional equipment because you are expanding your business, money lenders will be more eager to lend you money at lower interest. That's because they view your business as a safe bet since it is expanding. However, there are some rules to qualify for such a financing offer. Different money lenders will have different rules, but they could be something along the line of the business needs to be in operation for 5 profitable years, and the equipment is going to be used for the same business operations that has contributed to the success of your business.
- New business financing: If you are just starting a business and are looking for equipment finance offers, then proving that your business is going to be a success will be key. You can gain the confidence of the money lender if you show a solid business plan and have a number of assets that you can put up as collateral in the form of commercial property or product inventory.
For more information, speak with experts like Solution 7 Incorporated.