If you are a business owner thinking about or looking for construction equipment financing, you’re not alone. In fact, 8 out of 10 businesses use financing to get the equipment they need. Financing is a safe, secure, and common way to get what you need when you need it. There a numerous benefits to financing, and people do it for a bunch of different reasons.
It can be a bit overwhelming to start looking for construction equipment financing. Thankfully, First Capital Business Finance is here to help you! Below we list the questions you need to ask a lender before getting financing through them.
7 Questions to Ask Before Getting Construction Equipment Financing:
- What are your rates?
You will want this in writing. First of all, if you see a very low rate, be cautious. If you think it’s too good to be true, it probably is. An extremely low rate may mean the lender will make up for the low rate later in large fees. These fees can be levied through down payments, security deposits, late fees, and more. Don’t accept a quote at face value, either. Ask questions – see if the actual monthly rate matches the quoted rate. Make sure it won’t fluctuate or go up if you miss a payment. Know all the terms before you sign your name.
- How and when do I make payments?
One of the most important things to know is how to make payments. Make sure to ask your lender how much their rates will be, when they will be due, and what forms of payment they take. Also ask if there is any flexibility to your payments. For example, perhaps your business cycle experiences a dip during the wintertime, but then goes back up again when spring arrives. First Capital can work with you to make a payment plan that fits your business and its cycles! Seasonal businesses operate differently than other businesses. Make sure your lender understands how your business operates and when it might need some assistance. Certain financing will allow you to lower your payments when you’re not making much income due to getting a project up and running. A good lender will work with you.
- How familiar are you with the equipment I need?
Before jumping in, make sure that your lender knows what they’re funding for you. You should have done the research beforehand on what exactly you need. Your lender should know what this equipment is and what it is used for, as well as why you need the certain one you do. Your lender should not be clueless about what your needed equipment does and why. Make sure you choose an educated lender who understands your needs. This will also help when you need to repair or upgrade your equipment.
- What kind of support will you provide?
A great lender will go above and beyond to not just finance your construction equipment, but also to help you do it the right way. You should be able to reach out to their service representatives and figure out the answers to your questions easily. A great lender will work together with you to help you choose the right equipment and strategies for success.
- What information do you need from me?
That’s right – it’s not just all on the lender! You need to find out what they need from you to help you in the best way they can. Gather this information for them and present it to them. That way, they know both you and your business better and are better equipped to help you get what you need!
- Are there any tax benefits?
Financing new or used equipment can often lead to generous tax deductions (Section 179)! In 2016, you could claim up to $500,000 when you financed equipment. You could then write it off during subsequent years based on depreciation values as set by the IRS. Make sure to consult with a financial or accounting expert to learn more about the Section 179 tax deduction and how to qualify. Ask your lender what’s available.
- What is your policy if a piece of equipment breaks?
Sometimes, accidents happen. First Capital understands that we are all human and we all make mistakes. If your equipment gets damaged or breaks, you’ll need to know what the next steps are. Handling broken equipment incorrectly could lead to negative consequences. It is essential to ask your lender “what-ifs” like this one so you are prepared if disaster strikes. Finally, you should know how long it will take to repair or trade out any equipment so you can get back to work asap!
First Capital Can Get You the Equipment You Need Fast!
Construction Equipment Financing: 7 Questions You Need to Ask | First Capital Business Finance