As everyone looks forward to 2021, it’s a great time to start looking for new ways to help your small business grow. The benefits of adding new equipment are endless. It gives you the ability to become more efficient and increase your output, and even expand to new markets. As you gear up for the New Year and new equipment, we put together a quick guide to help with your business research.
Here the top seven things you should know before purchasing equipment with equipment financing:
1. Know Your Options
Did you know that the #1 reason why businesses fail is that they don’t have enough cash in the bank? Before purchasing new equipment, think about the impact it will have on your balance sheet. Instead of eating up your savings all at once, what if you could spread out the cost of the equipment over time? Equipment financing breaks down the cost of your equipment into affordable monthly payments. Not only does equipment financing keep your business liquid, but it also allows you to use your hard-earned cash for uncertain times or fast opportunities.
Equipment financing has its advantages: Not only will your equipment produce revenue while you pay for it, but it also helps keep your cash in your possession for investing or paying for business expenses.
Some ways to spend your cash include:
- Online marketing
- Digital advertising
- Attending industry tradeshows
- Unexpected equipment repairs
2. Do your due diligence
When you start researching different lenders, you want to find a financing partner that knows your industry. A lender with equipment expertise will better understand the importance new equipment will make to your business. Not only will your business have a better chance of being approved, but they’ll also be able to offer flexible financing programs that fit your industry. As you evaluate lenders, you want to make sure your business has the best chance of approval in the timeframe you need it.
Questions you can ask:
- How long does it take to get approved?
- What are their qualifying criteria?
- What are the steps of the financing process?
- Do they have experience financing equipment?
3. Find A Reputable Lender
Find a reputable equipment financing company with your business goals in mind and start a relationship with one that works tirelessly to help you get the equipment financing you need. After researching lenders and choosing one that fits your goals, look at their reputation. How long have they been in business? How much equipment have they financed? What is their reputation with the Better Business Bureau?
As a trusted lender, Beacon Funding has funded over one billion dollars of equipment for over 30 years. And with an A+ Rating on Better Business Bureau, Beacon has helped tens of thousands of businesses across the United States get the equipment they need to grow.
Does the lender you’re looking at have good customer reviews? Customer testimonials give insight into what the experience was really like working with that lender. Beacon Funding even has in-depth video testimonials to help you evaluate their service.
4. Get Familiar with How the Equipment Financing Process Works
Getting the funds to afford expensive equipment isn’t always easy, but that doesn’t mean your application process has to be difficult.
To understand how the equipment financing process works, look at how reputable lenders run their application process. With Beacon Funding, we make your equipment financing process convenient for any busy business owner with six simple steps.
Here’s how Beacon’s Equipment Financing Process Works:
Step 1: You submit a quick and easy application
Step 2: You discuss your business goals with your dedicated consultant
Step 3: Beacon submits your credit package for approval
Step 4: You are sent an approval letter
Step 5: You sign the documentation easily through DocuSign
Step 6: You accept and start using your equipment
5. Know the Common Criteria Considered and How to Qualify
When you apply for equipment financing, a lender will ask questions and check if your business is eligible for a loan. Many traditional lenders have strict criteria to determine whether to approve your application, like having a perfect credit score. But because of Beacon’s specialty in equipment financing, we can get creative and consider a wider range of criteria.
Here are some of the criteria Beacon Funding looks at:
- Personal Pay History
- Business Pay History
- Equipment Type
- Cash Flow
6. Establish Business Credit Sooner Than Later
If you want to grow your small business, business credit is vital. While some business owners don’t see the benefit of building their business credit until it’s too late, the fact of the matter is businesses can’t expect to grow without access to bank loans or outside financing.
Here are some benefits to establishing business credit:
- As your small business grows, you’re going to need more funds and better cost control.
- As your small business gets more work, reliable customers, and bigger orders, you will need more funds to get more assets.
As your business builds credit over time, its reputation with lenders becomes stronger and more secure. This puts your company in a better position to acquire the equipment it needs to bring in more revenue.
7. Consider Leveraging Tax Benefits of Equipment Financing
Did you know that businesses that purchase eligible new or used equipment may qualify for tax savings? If you’re thinking about acquiring new equipment, consider the benefits of a Section 179 tax deduction when you purchase your equipment.
Section 179 allows businesses who pay cash, finance, or lease equipment to deduct all or part of the purchase price of qualifying equipment during the tax year. Unlike other depreciation methods, Section 179 helps to accelerate tax deductions and allows your business to benefit immediately. This incentive encourages small business owners to buy equipment and invest in themselves.
Here’s how your business can use Section 179:
Let Beacon Help You Start Your Journey Towards Equipment Ownership
Everyone has to start somewhere. Acquiring new equipment isn’t always easy, but Beacon Funding has your goals in mind. For over 30 years, Beacon Funding’s passion has helped thousands of businesses nationwide do their jobs by getting them the equipment they need. Contact us, and you’ll see how we put your business goals first.
With our positive, premium customer service, the Beacon family believes in helping the customer first. If you’re looking to purchase equipment to grow your small business, tell us about your equipment needs and let us help you start down your path towards equipment ownership.