If you are in the construction business, there would certainly come a day when you will feel the need for financing commercial or heavy equipment. Such equipment often comes at roof-shattering prices and does not always suit your pocket, but you need such equipment to grow your work. So, many business owners opt to take equipment loans or go in for financing. The loan or financing of equipment gives the borrower instant access to it and they'd begin to benefit from it. A loan would also save the borrower the trouble without having to worry about saving huge amounts of money before finally being able to use the equipment.
People who require equipment financing or leasing
Owners of any business which needs equipment to function can apply for equipment financing. Especially those businesses which require high-quality equipment benefit immensely from financing. If you are looking at expanding your business then to you can finance the equipment. People in the hospitality, fitness, agriculture, construction, landscaping, mining et al businesses often need heavy equipment to run their businesses effectively. It makes sense to go in for financing despite having a budget to actually buy such equipment as it is a smarter thing to do. You can invest the capital saved in covering other costs of the business and pay off the loan through comfortable monthly payments.
Choice of equipment loans or leasing: Which one to pick?
Business owners often get confused if they should go in for financing the equipment or lease it. There are advantages and disadvantages of both these methods of getting equipment for your business. Leasing, of course, means you are borrowing the said equipment for a particular period of time and you would be making monthly payments in lieu of that. Financing on the other hand means once you have paid off the loan over a time period you will be the owner of the said equipment.
Advantages and disadvantages of leasing
The advantage of leasing is that if after some point you don't need the equipment you can end the lease. Leasing is hence more flexible and you can even choose to replace or upgrade the equipment. While taking equipment on the lease you are not required to make down payments. The disadvantages of leasing equipment include the fact that you don't own the equipment and hence cannot resell it. You also have to agree to keep the equipment till your lease period comes to an end.
Advantages and disadvantages of financing
Financing means you are the owner of the equipment and can use it how you wish. You could resell the equipment and get back some of the amounts you invested in the equipment. Tax deductions can be sought on financed equipment. It can also be used as collateral for any loans you may want to take. The disadvantages of financing include the possibility of the equipment becoming obsolete by the time you finish your loan payments. Those with bad credit history can't get financing easily and they also need to make down payments towards the loan. Any repair costs of the equipment are borne by the borrower.
If you are looking at going in for equipment financing, you must contact LendX.