Top 3 Financing Options for Construction Equipment
Construction equipment can be one of the largest starting and recurring expenses for a construction company. When a large piece of equipment is no longer functional, purchasing new equipment can put a large financial burden on your shoulders. Luckily, there are many financing options you can consider taking advantage of, that will help lessen the economic stress of a large expense due to faulty equipment.
Equipment Loan to Purchase New Equipment
Equipment financing loans are an excellent option for many businesses. This is because it is a loan that is specifically designed for covering large expenses such as replacing equipment. Equipment loans are also beneficial since those with poorer credit will be able to receive an equipment loan much easier than a small business loan. Another positive to equipment loans is that you own your equipment from the start, unlike with equipment leasing. Unfortunately, equipment loans often have higher than average interest rates, although they still remain a great option for many businesses.
Small Business Loan to Purchase New Equipment
Small business loans are the premier loan option for anyone in the small business community. They are incredibly safe since they are backed by the Small Business Association, they have incredibly competitive interest rates, and they have very long repayment periods. Small business loans are not only great for purchasing new equipment or, they are also great for nearly everything else your small business needs. They are great options for purchasing property, delivering bonuses, and so much more. However, it can be somewhat difficult to apply for a small business loan if your credit is struggling.
Equipment Leasing to Purchase New Equipment
Another equipment financing option is equipment leasing. This involves leasing equipment for long periods of time. By not actually owning the equipment, you can upgrade to new equipment at any time and save a lot of money in the process. Your monthly payments for leasing will likely be much lower than monthly payments on any type of loan. Equipment leasing is ideal for those who need their equipment to be up to date always since they will not have to go through the trouble of buying and selling equipment frequently.
By taking advantage of some or all of these equipment financing options, you can lessen the economic stress of a large expense due to faulty equipment. Using this information, you will be able to make a more informed decision regarding financing options the next time you need to purchase new equipment.
