Many businesses require specific equipment in order to function successfully. Since most equipment is expensive, you need to find a method of funding that suits your budget and will enable your company to continue to thrive and grow. Here are some strategies for equipment financing that may provide the solution for your business.
Obtain a Loan from the SBA
The U.S. Small Business Administration helps businesses obtain loans and lines of credit that can be used to purchase equipment. The SBA does not loan money directly but rather guarantees loans provided by participating lenders. To qualify, you have to meet SBA requirements. For instance, your company must be a for-profit business based in the United States.
Lease Your Equipment
Leasing is an option when you need equipment quickly but you are not in a financial position to buy it. When leasing, you avoid taking on more debt and you acquire the advantages of delivery, set-up, and maintenance that equipment leasing companies provide. Additionally, you can generally claim the cost of leasing equipment as a deduction at tax time.
Finance with Peer-to-Peer Loans
If you are unwilling to enter into a leasing agreement and do not qualify for a loan from a traditional lending institution, peer-to-peer loans may be the right option for you. This involves obtaining personal loans from family, friends, or business associates in order to purchase the equipment you need. P2P loans enable you to avoid the strict payment terms and high-interest rates imposed by traditional lenders.
Apply for a Short Term Loan
Short term loans typically have higher interest rates, but they allow you to obtain needed equipment and pay for it in an expedient manner. Unlike with traditional loans, you can quickly pay off your debt with the increased income that the equipment you need helps you earn.
For more advice on how to use equipment financing, get in touch with Magis Funding.