When most people hear about the existence of equipment financing they think of things like borrowing money to set up kitchens in restaurants and buying coffee machines for a cafe, but the reality is that this kind of financing can help out an enormous amount of businesses. From aircraft financing for tour companies to loaning money to buy equipment for beer brewing, these kind of companies are absolutely essential for so many young businesses and they are able to offer a fantastic option when it comes to helping them to get their business off the ground.
Equipment financing is able to offer far more than most lenders can offer and these are just some of the reasons why.
Easier Application and Approval
Owing to the fact that these companies are lending money for the purchase of specific equipment, they have a much easier approval rate and a very easy application process too. This is something which businesses love. Not only does it require less from the business themselves, which of course is a great benefit to them, but it also means that they can get on with buying up the equipment so that they can kick off the business sooner rather than later.
Single Credit Line
Credit lines are important when you are in business especially when it comes to restocking products. Unfortunately however when you borrow money through more traditional routes, it can then be very difficult for you to find those lines of credit or to even be approved for them. When it comes to this kind of funding however we can see that it is much easier to open up new lines of credit, to help the business push forward. The reason for this is that the financing which you have received is precisely for the equipment which you have in the business. This means that further liens of credit are open to you, which wouldn’t be the case if you had an outstanding bank loan for example.
Increasing Earning Power
What many fail to recognize when they first set up their business is just how important it is to have high quality equipment which you can use for the success of the company. In the case of the tour company, the very best aircrafts will ensure that the customer feels safe and comfortable; in the case of the beer brewing company, the better the equipment is, the higher the quality of the beer, and the happier the customer will be. When companies take on loans from banks, they rarely dedicate huge portions of this to the quality of the equipment in the same way that they do when they have specific equipment loans. This is yet another reason why this kind of financing is the smartest option for new companies, and the more money that is made, the more that can be invested elsewhere in the business.
This is how equipment financing is able to greatly help new businesses.