Equipment Loans

Written by Jill Morrison
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Equipment loans are available to help businesses afford the purchase of expensive equipment. Approximately 90 percent of businesses cannot afford to pay the full cost amount for the equipment they need to purchase. Financing is available to allow for small monthly payments to be paid over an extended period of time. Leasing is another financing option that may be considered by businesses.

Choosing Equipment Loans

Equipment loans vary in terms of amounts that can be borrowed. The amount borrowed will depend on your business budget and the type of equipment you need for the business. Business equipment that can be financed includes computers, software programs, vehicles, technological tools, telecommunications, medical equipment, and heavy machinery. Loans are often taken for equipment by construction, technology, medical, restaurant, manufacturing, materials handling, delivery, printing, and disposal industries.

A variety of equipment loans are available for businesses to choose from. Examples of financing options include working capital loans, lines of credit, SBA loans, commercial bridge loans, and debt restructuring. Each business can choose a loan that is appropriate for their type of business, the equipment they need to function successfully, and to meet cash flow objectives.

Leasing is a popular alternative to purchasing equipment with a loan. Some leases are considered to be loans because financing plans are necessary in order to obtain them. Leasing equipment can be advantageous for certain businesses because it offers protection against obsolete equipment, conservation of capital, preservation of credit lines, greater budget flexibility, and tax benefits. Leasing allows businesses to try out different types of equipment by renting them so they can decide on what is best for the business.


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