From simply picking a name to deciding which services to offer, starting your own business can be overwhelming. Luckily, getting the equipment you need to succeed doesn’t have to add to the stress. With a good understanding of the process and a little bit of foresight, you’ll be all set to get your dream off the ground.
Know the process
The first step to getting your business equipment is to fully understand the financing process. Not only does it make the process smoother, but it also gives you peace of mind. The four main steps to financing equipment are as follows:
Apply-Depending on the company you decide to work with, this step can either be incredibly simple, or a bit of a headache. With some equipment financing companies, especially ones specializing in your industry, the application process can be as easy as 1.) Filling out the online app, 2.) Talking to a consultant, 3.) Providing any necessary financial documents. When going to apply for equipment financing, look for a lender that has worked to make applying as easy as possible.
Get Approved- After applying, a financing consultant will look over your application and make a decision. Some companies can get you an approval in as-little-as 24 hours! If time is of the essence, look for a lender that boasts fast approvals.
Sign the agreement-Once you have been approved and the details have been hammered out, you’ll sign the contact, most likely electronically, and arrangements will be made for equipment delivery/pick-up.
Get Your Equipment-Finally, your equipment will make its way to you. You’ll be expected to give it an once-over and provide verbal confirmation that you have received the appropriate equipment. Now, your lease officially starts, and you can put that equipment to good use!
Figure out your ideal terms
The next step, and maybe the most important, is to get an idea of what kind of financing deal you’re looking for. There are a few key thing to consider are:
The type of plan
There are several plan structures available, especially if you work with a company that offers flexible financing. A few top contenders are:
Lease-To-Own: This type of plan is hugely popular. With this payment structure, you’re working toward owning the equipment at the end. While the term lease may elicit thoughts of a traditional car lease where you return the car at the end, Lease-to-Own makes sure the equipment is yours, free and clear, at the need of the payment plan.
No Money Down: Also known as buy now, pay later and 100% financing, this plan requires no down payment. The whole cost of the equipment is financed and broken down into monthly payments.
Deferred Payment Plan: With this type of financing, you can put off your first payment for up to 90 days. This allows your equipment to start bringing in profit before you start paying for it.
The Nitty Gritty
Once you figure out the general plan that will work best with your business, you should think about what you can afford each month and how many months you would like to spread the payments out over. This refers to the monthly payment amount and the lease term length. They both depend a lot on each other. A higher monthly payment will likely result in a shorter lease and a low monthly payment will require a longer lease. Choose whichever fits best into your budget and cash flow.
Consider used equipment
Money can be tight when first starting a business, so financing used equipment can be a life-saver. You may have heard that getting financing for used equipment is difficult, but it certainly doesn’t have to be. As long as the equipment you have in mind is in good working condition and you’re working with an equipment financing company that is prepared to finance used equipment, you shouldn’t have too much trouble.
Sometimes the hardest part of the whole process is that very first step. Go ahead and apply! The next thing you know, you could have all the equipment you need to make your business profitable.