There are several ways by which you can obtain the funding you need to finance your construction equipment. After you’ve decided what kind of equipment you need for your business, and you have an idea of the specific machinery that will be most beneficial, you need to choose a financing option. The three main financing options for funding your construction equipment purchase are described below.
Small Business Loan
If you can secure a small business loan, that’s a very efficient way of paying for your construction equipment. Ideally, you want to match the term of your loan with the life expectancy of the equipment, so so that you don’t end up paying for it longer than you’re actually using it. If you go this route, try to find the lowest percentage rate you can, and that will usually be from a bank or credit union. If your credit history is not particularly impressive, you may be obliged to work with an alternative lender, and you’ll be able to find a number of these online.
When you get an equipment loan, you will become the owner of the equipment immediately, and you will be paying on it each month just like you would with a car loan. Once you have paid off the loan completely, you’ll have the option of using your equipment as equity so that you can purchase a newer version of the construction machinery. It will also give you the possibility of setting up a sale and leaseback agreement, wherein you would sell the equipment to a finance company and then lease it back for daily operations.
Leasing is an option that will get you the equipment you want, and allow you to always work with the most modern version of your machinery. You’ll also probably have lower monthly payments on a leasing arrangement than you would if you took out an equipment loan or small business loan. Leasing agreements typically do not involve significant down payments either, so it’s easier to acquire the equipment you need and put it right to work. At the end of your leasing agreement, you’ll have the option of extending the lease, purchasing the equipment, or walking away from it altogether.
Looking to finance your construction equipment?
If you need some construction equipment to help your business grow, but don’t have the funding, we may be able to help. Contact us at OneClick Commercial Funding so we can consider some possibilities with you for funding your equipment.