Whether you are paving roads or writing software, you will probably need to replace, buy, or upgrade your work-related equipment at some point. Purchasing the equipment upfront might be challenging for a small business, primarily due to the expensive overhead costs involved.
While buying already used equipment is a great way to save some money compared to acquiring new, used equipment can still be a significant expense.
You’ll likely require some type of financing in order to get the right equipment for your business without undergoing a financial crisis by setting aside the entire cost of a machine. This article will give you a clear outline of how you can get a used-equipment loan for your small business.
1. Check with Your Bank or Credit Union
When shopping for financing options, your first consideration should be the institutions you deal and transact with on a daily basis. While banks are not necessarily the best options, you have an advantage because you already have a developed working relationship with the bank.
This means that the bank is more likely to entrust you with a large amount of money at a lower interest. However, this does not guarantee you a loan as banks are known to be risk-averse, especially with small businesses. To qualify, you need to have a strong credit score with no bad history of unpaid loans and a strong business track.
2. Get an SBA Loan
The Small Business Administration, SBA, guarantees loans that are offered by verified lenders like banks at low rates for small business owners. You can apply for this loan to get used equipment and pay off the loan later. They are targeted to small businesses, so the chances of your loan being approved are greater if you lie in this demographic.
These loans typically range from $50,000 to $5,000,000. The downside of SBA loans is that they require a lot of paperwork and time before a business can eventually get approved for the loan. The approval and disbursement can take several months, which is often inconvenient for small business owners.
3. See if the Vendor Offers Financing on Used Equipment
In the aftermath of the financial crash in 2008, securing a loan has not been a walk in the park. The recession made traditional lenders impose stricter restrictions before giving credit, making it difficult for small business owners to get a loan even in our more prosperous times.
While banks can remain conservative with their lending options without feeling any impact, vendors have to make sales to get money. This means that some equipment vendors offer used equipment financing directly to the buyer in order to close sales.
Confirming with the vendor before purchasing any used equipment is vital and can save you a lot of money and the hassle of looking for a loan elsewhere.
4. Use an Online Alternative Lender
If you need money to finance your equipment quickly, or to secure additional capital to supplement your commercial or SBA loan, then alternative online lending is the way to go.
Typically, alternative lenders have less stringent measures than traditional lenders and offer a swift turnaround time. The loan options provided by an online lender can virtually cover all your business needs in real-time.
When you apply with an online lender like RidgeStone Capital, your application gets processed within a matter of minutes, and you’ll have cash in hand in a few business days. Our application process is fast and straightforward, helping you get the used equipment you need and ensuring you don’t miss any life-changing opportunity.
Some other services in our portfolio include:
- Flexible Business Loans – With a one-page simple application that will last lesser than 30 minutes, you get approved for up to $250,000.
- Business Line of Credit – Secure your business with up to $500K with competitive rates, which are low as 9.99%.
- Equipment Financing and Leasing – Other than financing you to get used equipment, we can finance you to lease depreciating equipment.
Our Application Process:
- Apply online through a simple one-page application. All you need is your Tax ID and three months of business bank statements.
- Our experts get back to you and discuss your used equipment loan with you. If approved, you choose the terms that best fit you.
- Once approved, your loan is deposited into your bank account within one business day.
Benefits of Used Equipment Financing
Operational equipment is the lifeline for every business and can be the difference between the failure and success of a small business. Acquiring used equipment financing is the smart way to invest in the health of your business. Equipment Financing:
- Can increase your working capital.
- Helps keep your equipment up-to-date which gives you a competitive advantage.
- Takes advantage of tax benefits that come with equipment financing.
- Frees up your other lines of credit.
- Has a straightforward application process.
While acquiring used equipment might seem overwhelming due to the cost involved, we at RidgeStone Capital are ready to walk this journey and finance your investment in the sucess of your business. For more information, feel free to talk to us, and we will be more than willing to assist.