If you are a business owner and thinking about taking out a level of finance, there are certainly a lot of different finance options open to you, all with their own specific advantages and disadvantages. A business can take out finance for several reasons such as for assets, help with a project or as times are temporary tough and this will be used to support the company. If you are looking to take out finance specifically for equipment you could even get specific equipment lending loans. Here are some of the options to consider and the advantages of each.
Equipment Financing
Specifically, for equipment lending, the financing option could be attractive for some companies. This is easy to get and, since you do not own the equipment, if there are upgrades to the technology or you wish to swap and exchange items, this can be done in a flash. One of the biggest disadvantages is that the interest rate and payments for having this can be high. In addition, you don’t own the asset therefore it is like a constant loan you pay however at the end of it, the assets do not below to you and need to be returned to the lender if you wish to end the contract.
Loan Finance
A loan could be a route to explore if you are looking to purchase equipment and there are many different companies that you can explore online. Depending on the length of time you wish to take out for the loan and the amount will determine the interest rate applicable. If you have a healthy credit rating, then getting an unsecured loan should be a pretty simple process with many options available to you.
If you are looking for a larger sum of money for the equipment, then a secured loan may be the only way you can secure the funds. This will mean that if you do not keep up with the monthly repayments, whatever assets you have secured the loan against are at risk of being taken by the lender. This could even be your own home. If you do not have a particularly good credit rating or have had some difficulties in the past, you may still be offered the loan but at a slightly higher interest rate. There are also specific loan companies available for people with poorer credit rating.
Credit Cards
If the equipment you are purchasing is not very expensive and you have confidence that you would be able to pay it within 2 years then you may wish to consider putting the finance onto a credit card that has an introductory offer or deal. You will find that credit cards have these sort of finance deals on a regular basis. There is usually an initial fee for this transfer of funds and if you do not pay off the full balance within the defined period you may well find yourself being hit with some hefty interest rates.
Deciding whether you want to lease your equipment or buy it outright is going to be one of the most important decisions you make for your business. Weigh up your options now.
