With fewer banks willing to make working capital loans to start up businesses. More and more new business owners have turned to equipment leasing to purchase the equipment they need to operate their business, while preserving their cash for working capital.
Why More Small Businesses Are Turning To Equipment Leasing
Equipment leasing is simply easier to get approved for than a bank loan. Since the leasing companies have the equipment as collateral, they feel saver in lending the money. They know that if the business owner can’t make the payments, they can always repossess the equipment and sell it at auction to recoup some of their cost.
With equipment leasing you have some decisions to make and we want to help you. Let’s take a look at some of the pros and cons of leasing equipment for your small business.
Pros of an Equipment Leasing Programs
- Generally a lease requires 2 payments up front as security. Much cheaper than the 10%- 30% down that many loans require.
- Equipment financing companies will approve a wide range of credit types. So even business owners with bad credit have a chance at getting approved
- An equipment lease can be put on your Dunn & Bradstreet report so that you start building credit for your business
Cons of an Equipment Leasing Programs
- Because of the risk involved in financing a start up business. The leases can be expensive
- Not all equipment types will be approved for leasing. Most leasing companies will shy away from “business opportunities” such as ATM and vending machine ROUTE financing. They will finance a business that wants to add a vending machine or ATM machine to THEIR LOCATION. But not a route.
- Not all equipment leasing companies will finance a start up business. You need to call and verify with them that they will consider financing a startup. Don’t forget to ask them their requirements! Some companies will finance a day 1 startup, while some say you need to be 6 months – 1 year in business before they will consider financing you.
How To Find An Equipment Financing Company
- When searching for an equipment leasing company, look for one that has built a solid reputation in your industry. If you have credit problems. Be upfront. Some leasing companies will only deal with A/B credit. While some will finance A -D credit. Be prepared to submit a statement as to why you have a low credit score and the steps you have taken to improve your credit. You may need to submit a larger deposit or have a co-signer.
- Make sure they will finance the type of equipment you need. As you shop for equipment, ask your equipment vendor for recommendations.
- Use the internet. Do searches for start up business equipment leasing, new business equipment leasing and equipment financing for start up businesses.
About the author: Irish Taylor has been with Startup Business Loans since 1992. She has been inspiring entrepreneurs and small business owners with start up business financing ideas and techniques. Through the years, she has helped provide businesses with solutions to loan and credit issues related to new business financing, SBA loans request and new business loans.
Watch our video for more supplementary information in equipment leasing programs:
The Rising Reputation of Equipment Leasing for Start up Business Financing
For more additional information, see the link below:
Saving A Lot Of Business Capital On Equipment Leasing
Where To Find Financing For Your Start Up Business
Simple Facts About Equipment Leasing – How It Can Help Your Business
Taking Advantage Of The Various Benefits Of Business Equipment Leasing