What is an equipment finance broker? Equipment financing is when you lease or purchase equipment, like trucks, vans, etc., for your business. The company that owns or manufactures these goods will provide leasing options to help you acquire them in exchange for monthly payments. Leasing or purchasing through an equipment finance broker can help you spread out payments over a longer time than if you were to buy or lease directly from a manufacturer. This type of financial product can be difficult to understand and manage on your own, so working with a third-party consultant may be beneficial. You will have a more comprehensive understanding of all your options and how they compare with one another. So you can make an informed decision on how to proceed with getting new equipment for your business.

Location

What state or region will your lender be operating from? How convenient is it to conduct day-to-day business with them and access resources like quick cash and help desk support? You will also want to consider how much travel will be required on your part.

The equipment finance broker should be located in a location that is convenient for you. The same goes for your current bank. If you want to ensure they will provide professional service, visit their branch. And speak with a representative at length regarding your options and what type of financing might work best for you. You may also consider talking to several other companies to get several different quotes from other banks or loan providers. That will be best to get all ideas.

Lenders

Once you have determined how much money you will need to secure, find an equipment finance broker that can offer flexible terms. A banker will better determine your lending options based on your credit score and cash flow situation. With some basic information about what you are looking for, she should be able to point you in the right direction. Also, consider asking whether or not it would be advantageous to hire an attorney or certified public accountant (CPA) for help navigating through financing options. The more help you have with negotiating rates and fees, streamlining paperwork and finding loopholes, the better off you will be long-term.

Charges

This is an additional fee levied on some lease contracts, and it is based upon three factors. They are overall interest rates, the overall length of the lease contract and overall equipment value. The interest rate charged is variable and changes over time. Normally, shorter-term leases have higher fees than longer ones. That is because lenders assume that if you are taking out a short-term loan, you might be less creditworthy than someone who is willing to take on a long-term contract. Borrowers with lower credit scores pay more for equipment financing as well as more in monthly fees. Lastly, bigger items cost more to finance due to their higher worth at resale time; those extra costs are borne by those doing business with leasing companies.

Final Word

There is a large number of ways to acquire financing for your equipment. However, not all of them are good. It is very important to find an honest lender who will enable you to get optimum financing for almost any situation you may be in. The right financing could mean having extra cash on hand, so you do not need to borrow any more money from your loved ones or simply being able to purchase additional equipment for your business. With a little research, you can find great rates and discover excellent programs that are ideal for what exactly is happening inside your company.