Most businesses require different types of equipment to run their operations smoothly. The equipment can be photocopiers, computer servers, commercial ovens, walk-in freezers, plants, and machinery among others. Whatever the case, the cost of procuring equipment, whether new or used, can be too much for any business to pay upfront. Fortunately, there is equipment financing. By applying for finance from Equipment Loans Online, business owners can acquire the equipment they need to run their business effectively and generate more revenue as they service their loan obligations.
How Businesses Can Acquire New Equipment
i) Asset Finance
This is the best option for any business. There are many asset financiers out there. They only require a small deposit to approve equipment finance applications. This can be in the range of 10-20%, but some firms can offer 100% financing to established businesses. No additional security is required as the equipment itself can serve as collateral for the loan. In case of default, the financier simply repossesses the asset. This means that no other asset will be touched as the repossessed asset will be auctioned to recover the outstanding balance of the loan.
ii) Hire Purchase
This is somewhat similar to asset finance as the business is required to pay a deposit and make regular monthly payments to offset the balance. However, the asset belongs to the financier and the monthly payments are simply considered lease fees. It is only after all the payments have been successfully made that the ownership can be transferred to the business. If the business defaults, the financier simply takes possession of their asset.
iii) Secured and Unsecured Business Loans
Business owners can acquire additional assets through secured and unsecured business loans. The best examples of securities that businesses can use include titles to their vehicle, inventory, and equipment owned by the business. With unsecured business loans, lenders can advance money to purchase new equipment based on the cash flow of the business.
How to Apply for Asset Finance Online
i) Find the right Financier
The first thing you should do when you need to acquire new equipment is to search for the best financier. The ideal financier should charge a reasonable interest rate on their asset finance products. They should also demand a low-down payment. If you can only afford to pay 5% of the purchase price, you should look for financiers who can accept a 5% down payment to approve asset finance applications. Only financiers with a long history of helping businesses acquire new assets should be considered. The terms and conditions of the financing agreement need to be checked especially when it comes to repossession of the asset in case of default. The ideal financier should give you ample time to redeem yourself if you default on the loan.
The processing speed of a financier is a key factor to be considered when comparing lenders. You do not want to work with a firm that is known to take more than a week to process applications. After all, the vendor may want to receive the outstanding balance within two or three days.
ii) Pay the Deposit
Most financiers will require proof of payment of the down payment before approving any application. After finding the equipment you want to purchase, you’ll need to negotiate the price with the vendor and explain to them the terms of the purchase. The next step will be to draft and sign the sale agreement before you pay the deposit. When you apply for the equipment loan online, you will be required to upload payment receipts and the sale agreement together with both your personal and business details. The best financiers will take just a couple of hours to process the application and avail the cash to the seller.
iii) Take Possession of the Asset and Service Loan Accordingly
Once you have paid the down payment, you can take possession of the asset and start using it in your business. The asset can help you generate more revenue, which you can use to service the loan. Once your loan has been approved, be sure to service the loan according to the agreed terms and conditions. Failure to do so may lead to repossession and adverse listing with credit reporting bureaus.
Due to the nature of the transaction, only asset financiers with secure websites should be given any consideration. You don’t want either your business or personal details to fall into the wrong hands. Therefore, you should do some research on this before you submit your application.
There are reviews and testimonials that can help you understand the reputation of the shortlisted financiers. Therefore, you should read as many reviews as you can find before you decide to work with a given firm. Remember to also check how different firms have been rated because you want to work with a highly rated business asset financier.
During your research, you should exercise a little bit of patience to ensure you can make an informed decision. It may also be a good idea to ask your business associates to point you in the right direction during your search as this can save you a lot of time.
