Equipment financing for small business, how and when?

//Equipment financing for small business, how and when?

Equipment financing for small business, how and when?

Many small business owners constantly require new financing in order to grow and support the production or retail facilities. One of the most common financing requirements is the requirement of funds for equipment purchase.  Obviously some financial institutions offer leasing options which sometimes is a better way of financing equipment acquisition.  But a lot of equipment cannot be leased and purchase financing is the only option which is also very difficult to find.

We offer our clients multiple options how to finance equipment and this article is just a glimpse of the possibilities how to get the required financing obtained. Our proprietary financing program allows financing different types of equipment based on strong financial performance of the company, ability to service additional debts with a healthy debt service ratio, and reasonable and logical equipment requirement.  Typically the first question that we ask any of our clients is what this new equipment allows the company to do. Is it going to improve business and bring new revenue? Sometimes companies are buying out leased equipment and if monthly debt payment is smaller than lease payment, therefore monthly savings start from the first day of purchase. Often companies are buying new equipment which otherwise is outsourced and therefore profit margins suffer from such outsourcing. In many such cases savings of about 50% of the profit margins are achieved and therefore such a purchase improves profitability of the company by minimum of 50%. Often companies are looking for equipment financing in order to expand the production facilities to cope with expanding orders coming from the clients. New equipment in this case would allow the company to make more money and grow which is ultimately the goal of any normal business. Having a strong and reliable equipment financing provider is important in any of the above cases; our company is capable and is one of the leaders in this sector in Toronto and GTA.

So what are the steps in order to see if company qualifies for any equipment financing?

  • 1st We suggest initial meeting in order to discuss the equipment requirement and financing requirement
  • 2nd Understand how much cash could be invested in equipment purchase by the business itself
  • 3rd Obtain proper equipment pricing including delivery and installation
  • 4th Verify that current financial position of the company allows proper debt repayment schedules and possible improvement in financial situation helps expanding the business and growing the business further.

Once the first 4 steps are clarified, we will be in a position to advise our client if equipment financing is viable and reasonable in the current position the client is in. Because most banks have very firm and inflexible financing requirement proper financing plan and staging is very important. Many transactions needs to be divided in several different steps in order to qualify, therefore proper advise and preparation can make the difference between breaking the deal or closing the deal.

What kind of equipment could be financed?

Industrial production equipment

Retail equipment

Automotive equipment

Garage and repair equipment

IT and computer equipment

Graphics and Printing Equipment

Agricultural equipment

Tractors, trailers

Bakery and pastry production equipment

Dental office equipment

Doctors and medical equipment

How much of the cost of the equipment can be financed with the financial institutions?

Financing could be offered up to 100% of the equipment costs. This will depend on the purchase price of the equipment, revenue and profitability of the company and many other factors. Not all types of equipment could be financed, therefore it is extremely important to consult with our firm before making any purchase decisions.

Our 7 years of experience and hundreds of deals completed will provide additional support to any equipment financing request that our clients bring to our firm. We strive to deliver the highest level of service and will try our best to achieve all of our clients’ equipment financing needs.

By | 2018-02-15T15:42:37+00:00 February 15th, 2018|Blog|0 Comments