Small business lending might be built to serve small businesses, but it often isn’t designed to support the success of those operations. With equipment financing, small businesses need lending services that can be flexible to the needs of their specific business model—not the other way around.
Specialized business equipment loans provide an alternative form of lending that actually serves your business model, rather than creating friction. Here are some of the leading ways equipment financing can be an asset to your business model instead of placing more stress on your business.
Fast Approvals to Keep Operations Moving
Many businesses looking to purchase equipment need this equipment to maintain their operations and/or operate at full production capacity. Slow approval timelines delay access to this equipment, disrupting operations, and cutting into revenues.
With same-day approvals, your business can minimize the delays created by the lending process itself, fast-tracking your new equipment acquisition. Processing delays can create financial logjams, create production bottlenecks, or even halt operations. Expedient approvals eliminate friction for your business.
Funding Access for Startups
For new businesses without a strong credit background or other financials, traditional lending may not be accommodating. This ends up creating even greater challenges for new businesses instead of offering services to support new business success.
With flexible loan programs to serve new businesses and other small businesses facing limitations of poor or no credit, equipment financing can provide more reliable funding to help businesses thrive. In most cases, the flexibility of these options surpasses the financial products targeted to small businesses by more conventional lenders.
No Need to Provide Your Own Collateral
Traditional lenders typically want small businesses to provide collateral against any equipment financing they offer. But if you’re a new business, you might not have the assets needed to fulfill this requirement. It becomes a chicken-and-the-egg paradox: You need funding to get business assets, but you can’t get business assets without access to funding.
Equipment financing works around this by using the equipment as its own collateral for your funding. This alleviates a significant pain point that can challenge business models where collateral isn’t easy to provide. As your business moves forward, these owned assets will strengthen your company’s financial standing and open even more doors to essential funding options.
Own Your Equipment Outright
At the end of the repayment period, businesses are able to fully own the equipment they’ve financed, providing them with an asset that can support their business in the future when collateral is needed or when valuation is being assessed.
By owning this equipment, you can claim depreciation that reduces your taxes. A financial specialist can help you understand exactly how to claim this depreciation and make sure this depreciation is claimed according to relevant tax laws.
Keep Your Cash Reserves, Protect Your Cash Flow
By financing equipment instead of purchasing in cash, you’re able to maintain larger cash reserves for your business.
This money can be used to support business growth in other ways, such as through greater investments into equipment or services, or a better financial cushion to keep your business solvent as it builds success. Liquidity is its own kind of asset, giving your business flexibility to address new challenges—or seize upon new business opportunities—that may come your way. Preserving your cash reserves gives your business flexibility, which is why many business owners opt for a business equipment loan even when they could afford the cost of equipment out of pocket.
Financing That Helps Your Business Grow
Too many traditional lenders offer restrictive lending options that create challenges for small businesses, instead of opening the doors to greater success.
Don’t let these limited options place a strain on your business model. Use business equipment loans to harness the support your business needs to thrive. Ready to get started? Apply for financing today.
