How Well Do You Know Equipment Financing?
Some companies will need large and/or expensive equipment to run daily operations. If your company is one of those, then you will need to know about equipment financing and how it can help keep you working smarter for longer. The equipment you use can help you move your company forward or keep you working harder than necessary. You can lease or finance equipment for purchase depending on your needs and budget but knowing a bit about this financing option can be a big help in your decision to lease or purchase the items you need.
Equipment Leasing Calculators
Many equipment financing companies will have simple rate calculators on their websites to help give you an idea of what you will be paying for a lease. These calculators can be deceiving, however, with some estimates putting the real cost at double the one given by the calculator if your credit is low. It is better to get a quote from a real person before signing any contracts, so you are not surprised by any hidden risks and fees. This can require a bit of homework into the equipment costs, the financing options and even the average interest rates and lease terms.
Part of the reason why equipment financing is so expensive is because the equipment is not cheap to purchase, maintain and store for the leasing companies. By leasing this equipment, you can share the cost across all the customers of the leasing company, but it is still an investment. Equipment tends to depreciate quickly, and the lender will need to find a way to pay for new equipment or to sell the old stuff once the term of your contract is over.
If you choose to use financing to purchase your own equipment, instead of leasing it, these same rate factors will apply. Your monthly payments, and interest rates, are likely to be high because of the cost of the equipment, the costs involved in recovering the equipment if you default and even the resale value of the items when you want or need to upgrade them.
Finding the right equipment financing or leasing terms is a large task because you can’t do your job with out the right items and you can’t afford those without the right terms. This is where knowing a bit about financing, leasing calculators and rates comes in handy. The more research you do before getting the equipment, the easier it will be to afford the items you need.