Finimpact

Frequently Asked Questions(FAQ)

Is it hard to get financing for equipment?

This depends on the lender you go with and your personal financial details. Those with higher credit scores can likely secure financing online in just a few days. Those with lower scores or those who prefer in-person traditional methods of lending may have to wait weeks to find the right option.

How does financing heavy equipment work?

Heavy equipment financing will be like taking out any other loan. Typically, you’ll be getting a personal loan that has a monthly schedule of payments for a set term and you’ll pay interest over the life of the loan.

If you work with a brick-and-mortar bank, you'll likely have to wait a few weeks to get funding, while online lenders can provide cash in hand in just a few days. No matter which option you choose, you’ll need to be ready to offer personal and business financial details, including your credit score.

What is needed for equipment financing?

When you apply for a loan, you’ll need to provide information about yourself and your business and likely submit to a credit check. The lender wants to know that you’ll be able to repay your loan in a timely manner. Be prepared to potentially provide the following documents:

     Tax returns.

     Any and all financial statements related to your business.

     Business license or documentation.

     Bank statements.

What type of equipment can be leased?

You can rent most types of equipment nowadays. However, anything customized to your specific business may not be leasable. Rare, more complex machines or parts that aren’t in high demand will also be more difficult to find since it won’t be worth it financially for the lender.

What are the types of leasing options?

There are a few different types of lease agreements. A capital lease, which typically ends in buying the equipment you’ve been leasing, allows you to claim the equipment like it’s your own on your company balance sheets.

An operating lease, on the other hand, is a more traditional lease with lower monthly payments and does not end in you owning the equipment. This is the perfect type of lease for equipment that becomes outdated quickly, like computer equipment and other technological equipment, for example.

How long does it take to arrange equipment leasing?

That depends on if the equipment you need is available locally through a lender, or if you’ll need to have something shipped. Local options you can possibly have same-day or within a few days, but anything that needs to be shipped could take months.

What are the costs of equipment leasing?

Conclusion

Equipment leasing and financing are both good options, but the right choice for you ultimately depends on your needs as a business. Those looking for low monthly payments may prefer leasing while those leasing long-lasting equipment may prefer to finance.

For either leasing or financing, Credibly is a good lender to start with. With multiple loan choices and an ultra-fast approval time, Credibly has an option for most businesses.

About the Author

Christopher Murray

Christopher Murray

Personal Finance Expert

Christopher Murray is a professional personal finance and sustainability writer and editor who enjoys writing about everything from budgeting and saving to unique investing options like SRI and cryptocurrency.

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