An individual starting a business does not have an easy time setting the venture, similarly expanding the business to serve more customers is a move that needs a lot of work and consideration. Businesses require assets, to run and equipment happens to be one of the assets that are used in the process of generating revenue. For this reason the procuring of equipment is necessary and you either have to buy or hire equipment on long-term because it’s a necessity. Upon making up your mind on what equipment you need to have , its advisable to draw a plan on what aspects you will use in selecting of the equipment that will serve you properly.
Having found the equipment that you need, it’s almost always the case that there will be several asset financing companies and banks that will want to go into business with you, here you have to choose. Asset financing does not have to be on hire or leasing terms but if buying is also a good option especially because you get to have ownership but leasing equipment has its advantages too.
The amount of money that you can borrow varies on the type of the equipment that you are in need of and whether that equipment has been used or not. In asset or equipment financing, collateral has to be there because the truth of the matter is that sometimes agreements go south and cases of defaulting of payments comes in ,the good thing however is that the business person will get to own the equipment and generate revenue from it all the while. In equipment financing, the fact of the matter is that it’s similar to a loan, with this in mind, the next fact to come in mind is that there is interest and the interest rates of equipment financing is range from 8% to as big as 30%. Equipment financing companies offer fixed repayments periods , this is good for the client because it’s easy to plan on how to repay asset financing companies reason being there are no worries about fluctuation of the grace periods.
The type of equipment and for how long it will be useful to the business will be among some factors that will determine how long or short the length of the repayment period will be. Some asset financing companies will establish the depreciation value of an asset as being 36 moths or one year during which the loan has to be repaid.
Avoiding the many taxes that are tied with purchasing of construction equipment are among benefits that makes a client think twice on whether to purchase or lease. New to equipment financing? Before making major decisions do some research to have an idea of how to navigate through the field?