Equipment loans are fast, simple and will reduce your overhead cost exponentially. The process may seem tedious and you may feel unacquainted, but if you follow these simple steps, you will be able to complete the process hassle-free.
1. Pick the right equipment
Research about the different equipment options, it can be used or new. Spend time in the market to find the right equipment that suits your business and your business plan well. Consider the expenses that will come with the equipment, fuel, repairs, upgrades and so on.
Once you have a fair idea about the equipment, or have found a seller, get a Bill of Sale for the loan approval.
2. Finance the equipment or Lease it?
Buying is an option if you have enough capital to make a large down payment or will need the equipment for years to come. Leasing might be an easier option for new companies or if your equipment becomes obsolete every few years. If your business needs continuous technology upgrade, you should consider leasing the equipment. Also, if you have a cash crunch and are unable to make a lump sum down payment, leasing would be a safer choice.
Before a lender considers your loan, they need to know everything that is associated with your business, your clients and their invoices or the company you are working for and so on.
The basics would include, you ID’s, Corporation papers, Bill of Sale or Ownership of the equipment, Bank Statements. If the deal exceeds $100,000, they may ask for your financials as well. It is a good idea to have these documents handy when you start your search for a lender, it will really speed the process up.
Every lender has a different list of documentation, but these are the basic documents any lender would as ask for in the beginning.
4. Credit Score
When you are collecting your documents, take some time and look at your credit score. If it is low, expect a higher interest rate. Credit scores are crucial, as they are the yardsticks for risk for the lender, they judge the risk you possess as a borrower.
An extremely low credit will make the loan process extremely difficult, if possible, take some time and work on your credit, and increase that number before you submit your application.
5. Take your time while accepting the terms
Once you submit your application, it will not be long before you get an answer, if you get the approval, Congratulations! Make sure you discuss the terms before signing the papers. At Planet Financial, you have no obligation to sign the papers unless you are fully satisfied with the terms of the agreement.
If you didn’t get the approval, it is always a good idea to ask why. Sometimes, the things are easily amendable, and you can resubmit your application. At Planet Financial, we try our best to get you the approval at the best interest rate possible, but sometimes it doesn’t work out, we insure our customers know the reason behind the decline and we help them work through it.
And there you go, you are all set for your Equipment Loan Financing.