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Financing Your Equipment will Lead your Startup to Success

Most businesses need equipment in order to operate which can include everything from computer systems to furniture. However, most startups simply do not have the capital to fund what they need. Instead of having to come up with cold hard cash to buy the equipment that’s needed or having to use their credit lines, new business owners can acquire the equipment they need via special equipment financing.

The current economic conditions are challenging for all types of businesses and especially so for those which are in the pre-launch stage. It is more important than ever for startups to understand their options for financing the equipment needed to operate and grow.

If you’re about to launch a new business here are some clear benefits you’ll receive from acquiring the equipment you need through leasing and other financing methods.

Your Cash Won’t Be Tied up
When you finance the equipment necessary to operate your business, you will have the money you need for opportunities such as marketing, working capital or seasonal cash flow needs. It’s very important for any startup not to use a big chunk of it’s available cash flow for just one aspect of the business as inevitably there will be situations which arise that require cash. You certainly don’t want to risk losing your business after just a few months because you didn’t have the means to cover those expenses you didn’t plan for. Therefore, it would be in your best interest to seek out a financing option that makes good business sense.

You Can Obtain 100% Financing
One of the best things about financing business equipment is that in a lease, you’re given the opportunity to obtain 100% financing including sales tax if you need it. If you were to take out a regular loan for the equipment you need, you will most likely be required to put down 20%. To put that into perspective, if you need a $50,000 piece of equipment, you would have to come up with $10,000 which is a big chunk of change when you’re trying to get a new business off the ground.

You’re Given the Option of Payment Flexibility
Even though a traditional bank loan features many of the same options as a lease, most banks don’t take advantage of these options. For example, a conventional bank loan can be written so that the borrower is given a variable payment structure but most banks don’t do this. However, equipment financing companies routinely include variable payment options in the lease documents they draw up. This is one of the main reasons so many startups today are opting to lease as leasing offers a lot of payment flexibility.

Can Upgrade Your Equipment if Needed
In order for any business to remain competitive, it needs to have access to the latest technology that’s in use today. There are numerous leasing programs out there which allow businesses to upgrade or replace their equipment. You can even find a leasing option where the equipment finance firm is required to handle installation and maintenance.

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