Tips and Tricks for Financing Heavy Equipment
Your business needs equipment to operate. The idea of having to buy new heavy equipment may be intimidating because it can cost a lot of money. Fortunately, there are some options for financing that can help make the expense more manageable. These are a few tips and tricks you can use the next time you need funding to pay for equipment.
1) Know Your Financials
When you make an application, you are going to need to provide financial statements. It is a good idea to be well-versed in your current financial status. This will help you make better decisions about which financing to pursue. It will also help you gain the trust of a potential lender more easily. Know your income statement, balance sheet, credit history, debt utilization, and other key financial statistics.
2) Check Your Options
You don’t need to take the first loan offer you get. Spend some time to explore all your options and choose the one that is best for your business. There is no harm in shopping around before making a decision. Just be careful not to take too long. If you don’t respond to a loan offer, you may lose it. There are some services that will help you quickly compare offers for financing.
3) Talk to Other Business Owners
Do you know some business owners in the same field as you? Talk to them about their financing. You don’t even need to talk with direct competitors. For example, if you are in construction, you can talk with a manufacturing business owner. Both organizations need expensive, large equipment to operate. Find out what your contacts have done for financing. The chamber of commerce can be great for this.
4) Educate Yourself on the Details
Many lenders will make offers in ads that don’t fully reflect their loans and rates. For example, there may be a starting rate stated in the ad. This doesn’t mean that anyone is trying to be deceptive. However, you should read the details before committing to a loan. Make sure you understand how much the loan is going to cost. Also, evaluate it against your cash flow, especially for your slower months.
Heavy equipment financing can be a good way to ensure that your business has everything it needs to succeed. However, getting a loan can be a complex process. Give yourself time to make a well-informed decision. Also, do your research and talk with others about their experiences. You’ll be glad you put in the hard work.