Equipment financing is all you can think about, especially since you and your business partner just found the best location to get started. But as you think more and more about equipment financing, a question pops into your head: “How do I get equipment financing anyway? Should I just finance everything? Or rent?”
1. Decide if You Want to Rent or Own
One of the first things you should think about is whether you’ll rent or buy your equipment. There are benefits to each, so don’t assume one is inherently better than the other.
Renting equipment is perfect for businesses that are seasonal and don’t have the space to store the equipment when it’s not in use. Another great benefit is that you won’t be responsible for equipment maintenance. Plus, you could have the equipment brought to your business or worksite so you won’t have to worry about transportation.
Buying equipment is perfect for businesses that are open year round and use the equipment often. Yes, you will have to maintain the equipment yourself, but once you factor in what the equipment costs, it might make much more sense to buy instead of rent.
There are benefits to both renting and leasing so don’t assume one is inherently better than the other.
2. Consider Working With a Flexible Financing Company
We’re not saying you can’t go to your local bank. If your credit is great and you’ve been in business for a few years, working with a bank is fine. However, if you’re just starting out and your credit is not the best, a bank might be less than willing to work with you.
The truth is that banks like to work with solid businesses that have a proven flow of revenue. Unless you have hard evidence that your new business will do well, it might be best to work with a financing company. Financing companies tend to be more flexible in that they have many programs to suit your business type and credit score. Plus, not only could you get approval for equipment financing in 24 hours or less, you also don’t have to worry about how long you’ve been in business. You could be in business for only three days and still get financing from a financing company.
A business plan helps financing companies craft an equipment financing that works for you.
3. If You Haven’t Already, Write a Business Plan
Regardless of where you’ll get financing from, it’s always best to have a business plan on hand. Business plans are great for when you’re pitching to investors or getting equipment financing. With a well-written business plan, financing companies can better craft equipment financing that fits your needs with affordable rates.
Business plans also give you the chance to write down what your overall goals are and how you plan to achieve them. You can use a classic slideshow to display your plan or you can use a program with a business plan template. To learn more about what a business plan should include, check out this helpful article from fitsmallbusinessplan.com.
4. Get All Your Documents Ready
Now is the time to check with your bank, lender, or financing company to see what documents they need to get started. Depending on who you get equipment financing from you might need documentation of your current finances, so get them together now. This saves you time from having to scramble for them when you need it. This is also the perfect time to gather any information you have on what type of equipment you’re planning to finance.
Get Equipment Financing with First Capital today!
First Capital Business Finance is proud to offer a wide selection of programs to our customers. To learn more about our equipment financing and find out what you qualify for, call us at 888-510-3573 to speak with one of our knowledgeable advisers. It’ll only take a few minutes to find the solutions that fit you and your business, so call us today!
How to Get Financing for Your Business | First Capital Business Finance