Small businesses really are the heart of American industry. They employ about half of all Americans, and, according to Forbes research, 543,000 new small businesses open each month. There are few small businesses that can confidently say that they don’t need any help purchasing equipment. In 2011 alone, about 800,000 small business loans were granted, and almost a full quarter of those companies were in need of loans because of slow sales.
New equipment can be incredibly expensive, and a wise business owner know that it’s dangerous to take on loans for that equipment with exorbitant equipment loan rates. That doesn’t mean all equipment loans are bad. In fact, they’re an excellent option for small businesses. Here, we’ll look at what small businesses can expect from equipment financing rates. The last thing you want is to get caught with an overly expensive monthly payment. Equipment financing rates vary, depending on the volume of equipment, the type of equipment, and the capital and financial capacities of the company making the request. If you’re a low capital prospective equipment loan client, it’s important that you fully prepare your financing. First and foremost, confirm that all the equipment financing rates you have received are from real lenders. That way, you can be entirely sure that the costs of your agreement can be understood clearly before you commit. Less reputable companies might offer faulty equipment financing rates, which can make it very difficult for small business owners to adequately finance their agreements. Look for these things in an equipment loan provider in order to make sure you’re getting genuine equipment financing rates:
- Look for a lender that offers flexible terms and competitive fixed interest rates. Some will even allow you to lock in your rate for the duration of the term. If possible, ask for pre-approval so you can begin shopping even before you have funding in place.
- There is no reason you should have to put up additional collateral besides the equipment itself. Make sure the company you choose only uses the equipment as security.
- Choose a company that finances a large percentage of the purchase price. Nothing lower than 75% should even be considered.