Upgrading Your Equipment? Then You Want Equipment Financing.
Businesses that utilize specialized equipment to carry out operations can benefit and increase revenue from an upgrade. Here’s how equipment financing loans can get you on track to grow your business.
What is Equipment Financing?
Equipment financing options help you finance up to 100% of the new or used equipment you need for your business. Applying for an equipment loan is typically a fast and easy way to finance the purchase of ALL types of equipment—computers, machinery, or whatever else you need.
Leverage equity in your owned Equipment
With a secured loan against your equipment, you can take advantage of the equity in your existing equipment, or use newly-purchased equipment as collateral.
Equipment Financing Details
Up to 100% of Equipment Value
1 - 8 Years or Expected Life of Equipment
As Low As 4.59%
As Fast As 2 Days
Equipment Financing Pros vs Cons
PROS
- Monthly Payments
- Avoid Large Upfront Costs for Equipment Purchased
- Longer Payment Terms
- Minimal Paperwork
- Equipment is Used as Collateral
CONS
- Equipment Could be Obsolete by the Time Loan is Paid Back
- Higher Rates for Lower Credit Scores
- Equipment Depreciates - You cant deduct full cost each year
- Must Have 1+ Years in Business
- Rates & Terms Heavily Determined by Credit and Equipment
How Does Equipment Financing Work?
Equipment financing or equipment leasing options are a type of small-business loan designed specifically for the purchase of machinery and equipment essential to running your business. You can use an equipment loan to purchase anything from office furniture and medical equipment to farm machinery or commercial ovens.
Small business growth can come in many different forms, but all small business owners know that it takes money to make money. Sometimes you just need that new piece of equipment or machinery to rev up your business growth and start bringing in more revenue… But how can you afford that equipment to catapult your business with Upwise?
You can use the proceeds of a business loan to purchase almost any kind of business equipment, from computers to cars— construction equipment, heavy equipment, and everything in between.
An Example of the Pricing on Equipment Funding
Let’s say you have a piece of construction equipment you’d like to purchase that costs $10K.
Upwise offers to front you the cash to purchase that equipment, but they’ll charge you 12% simple interest over a 3-year (or 36-month) term.
With a 12% APR, your business equipment loans will make it so that your $10K piece of equipment will actually cost you $11,957.15, with a monthly payment of $332.14 over the next 3 years.
As a business owner, it makes more sense to have a $332.14 monthly expense for the equipment rather than coming out of pocket for $10k upfront.
Some Questions to Ask Yourself About the Cost
At this point, you need to decide whether or not a business equipment loan is right for you, you’ll have to take a look at your business’s finances and ask yourself whether an equipment financing loan makes sense for your business plans.
Can you save some money by shelling out $10K upfront for the equipment avoiding interest payments, or will that huge expense hurt your business’s cash flow too much?
And if you can’t afford it now, should you chose to wait until you are able to save up enough money and buy the equipment later?
It could mean lost profits since you could have used that equipment in the meantime by funding it with a business equipment loan! You have to weigh your opportunity costs.
Through indecision, the opportunity is often lost. Fundamentally, you need to figure out whether the opportunity cost of waiting and saving outweighs the interest payments you’d make to have that equipment right now with an equipment funding loan from Upwise.
Equipment can be considered one of the largest purchases a business owner makes in the life cycle of their business. If you plan your business finances well, the right piece of equipment should bring in a lot more revenue for your business, than you are paying in interest for the equipment loans.
At Upwise we offer equipment financing options with terms ranging between 1 – 8 years. Most equipment financing lenders only offer up to 5-year terms maximum.
Our loan team here at Upwise is here to assist you every step of the way in securing that equipment needed to help your business grow Upwise. If you have any questions regarding how equipment funding works, please call our team at 77-55-UPWISE.
Who Qualifies for Equipment Financing?
As it turns out, most businesses can qualify for equipment financing loans even start up businesses. Equipment financing approvals are based on personal and business credit scores, industry type, positive trade history, existing trade lines, Debt Coverage Service Ratio, and the equipment quotes provided by the business owner.
How much you qualify for and the interest rate you’ll pay is determined by the value of that equipment, your business’s financial history, and your credit scores.
Equipment financing can be a great option if your credit rating is less than perfect, too, since the equipment acts as collateral. You can also leverage existing owned equipment to get a loan using your equipment as collateral.
In fact, our underwriting team is just as concerned with what’s securing the loan, as we are with your borrowing history. The type of equipment you are purchasing is an important aspect in the approval process.
So, if you’re planning on investing in a high-cost (and cost-retaining) piece of equipment, then we might be willing to work with you, even if your credit profile and finances are not pristine.
Our equipment financing team will assist you in finding the right equipment and make sure your approval is custom-tailored to fit your business needs.
Short-Term Loan Requirements
Over $100K
Over 550+
6+ Months - Start Up Businesses with Good Credit Encouraged to Apply
Good Financial History & Tradeline History
* Note: These equipment financing requirements are based on previous Upwise customers and is just an average.
What Does Equipment Financing Cost?
With equipment financing, the most important thing to keep in mind is that it stops you from needing to pay the entire cost of that equipment upfront. It is just like a lease-to-own program when financing a car. Instead, you’ll pay it off in regular installments, until you own the equipment outright.
However, because you will be paying interest on financed equipment over a longer period of time, you’ll be paying more total money with an equipment loan than you’d pay if you purchased the equipment outright without financing. The tradeoff is worth it for businesses that can’t afford a large, upfront expense or does not want to deplete their cash flow with such a huge one-off acquisition.
Equipment financing is a great option for all small businesses looking to expand their business. A variety of different things can be considered equipment for a small business, so please make sure to ask your Upwise equipment specialist what items are considered equipment by our underwriting team.