Businesses need to grow and be competitive in today’s world, they need to optimise all the assets in every manner and form. Equipment financing is a better option to opt for as compared to conventional loans or simple outright purchasing. Equipment financing costs less than the other two options and has a larger impact when it comes to increasing the overall profitability of an organization.
When considering financing options, a key factor is to work with only experienced professionals who understand your industry and your business. The equipment finance specialists can help you in devising the optimal equipment acquisition strategies that best suit your business needs in order for it to flourish and succeed.
Different financial solutions can be availed to get the correct financing deal for the equipment, which include finance and operating leases, receivables finance, hire purchase and loan and stocking finance.
AIM OF EQUIPMENT FINANCE
This type of financing makes sure that your business stays neck to neck with technological advances. But equipment financing requires a well thought-out and structured plan to help improve cash flow. Any organization’s business, tax objectives and its balance sheet are very pivotal in structuring a detailed plan.
Another point to always keep in mind is that how you can optimally acquire and use your assets to achieve your organizational goals and achieve the desired results. Most private lenders have their own asset management teams that are able to manage a large range of equipment coming off lease, and they further inspect, collect and sell these products via an arrangement of varying outlets in order to maximize value.
EQUIPMENT FINANCE FOR HIGH VALUE ITEMS
Equipment Financing can be used for acquiring a large range of different equipments and an array of products, software and services. For the IT industry, computers, servers, IT storage equipment, laptops, telecoms and other IT related office equipment can be financed. If you are in the industrial sector, then machine tools, process control equipment, food and beverage processing equipment, testing & measuring equipment, construction equipment, handling and lifting equipment and heavy vehicles like trucks and trailers can be financed. Even medical and health care technologies are covered by such finance loans.
EQUIPMENT LEASING OPTIONS
In comparison to cash purchase, leasing is more affordable as it requires no upfront payment or any deposit. Furthermore, all prior arrangements with the bank are not changed. This gives you more flexibility and you can decide to make use of the facilities after some time and focus your capital on areas of your business which require immediate attention and investment, while remaining in possession of your desired equipment.
Leasing also diminishes the risk that is associated with owning assets whose value decreases with time and achieves cash flow in your favor. With leasing, you can get any equipment’s cost fixed and pay it regularly over an agreed time frame. But when you seek out leasing services, you need to consider a number of factors which are primary term (the lease agreement’s initial term), residual investment, off balance sheet, capital allowance, fair market value and front end rental.
Equipment financing and leasing improves cash flow, concern for equipment obsolescence and creates reinvestment opportunities.