5 Strategic Steps to Getting Equipment Financing
There are a lot of benefits to financing equipment, but for many, it can also seem like a pretty scary venture. But, if you go in with a plan and follow these steps, financing or leasing equipment might be the best thing you did for your business and can even help you gain a competitive edge over your competition.
1. Think about how you will be using the equipment
What kind of equipment are you looking to purchase? Do you need it for just a year or is it a piece of equipment you will pay for itself in a couple of years? Doing a quick cost/benefit analysis by estimating how much revenue the new equipment will generate can help you figure out if financing the equipment will make you profitable.
2. Research and use an equipment finance partner who understands your business
This step is critical to your overall success. Working with someone who understands your state's regulations, the market fluctuations, and how your business runs and operates. This will help in keeping costs in check and making sure lease terms make sense for you.
3. Calculate your total payments and costs
Open communication will help eliminate any misunderstandings about your lease or loan. That means speaking to your finance partner about total payments, the monthly payment due each month, and any additional costs (taxes, insurance, etc.).
4. Understand the terms of your agreement
Make sure you look over the agreement completely and understand everything that was included. If you don't understand it all, don't fret! Your finance partner representative will be able to explain everything to you. This includes questions like:
- Will your equipment finance company assume the costs for the equipment's insurance, taxes, and maintenance?
- What are my options at the end of the agreement?
- What procedures must I follow if I choose to return the equipment?
- Are there any extra costs at the end of the agreement?
5. Close it out
Once all your questions have been answered, you feel comfortable with the terms and are ready to finance, sign the deal and start enjoying the benefits of your investment!
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