Equipment Financing Guide to Small Business Owners


Equipment financing helps business owners to rent equipment from a leasing company or vendors for a period of time. Your business must return, renew, or purchase the equipment at the end of the lease period. Typically, leasing equipment is way more expensive in the long term than purchasing it, but for businesses, it will be lower on a monthly payment basis. It will help many businesses in improving cash flow along with, working capital.

You can’t afford your business equipment upfront? Do you need to replace old machinery? You can apply a loan to finance your business equipment. How does equipment financing work?

Equipment Financing is a loan to purchase your equipment or tools for production. Some lenders provide recurring payment terms that include interest. As an assurance to the lender, they will require to hold a property as a collateral against your loans. You will own the equipment free of a claim once you paid your loan in full.

Arrangement of Equipment Loan may also force you to provide additional business or personal assets. Failure to pay your loan result lender to reclaim your business or personal assets. Make sure to review the loan terms to understand completely.

let say you are going to open a Computer shop, you will need a lot of computers, chairs, tables in order for you to run the operation. For example, all your equipment cost $45,000. Your approved loan equals to 80% ($36,000). Meaning, you out pocket $9,000. You can keep the $9,000 in your cash reverse to balance the other cost such as marketing, rental, and marketing.

Equipment Loans is financing your physical assets. Here at JNA Financing, all businesses that use physical equipment can avail equipment loans. You need vehicles, machinery, or computer to run a successful production.

It involves a lender providing business finance, against the security of a piece of equipment. For businesses to flourish, a wide variety of machinery and equipment are necessary to make sure that the business operates at the pinnacle, regardless of the fact that whether it’s heavy machinery or IT upgrade.

equipment financing

Types of Equipment Financing

Construction Equipment – it is used by the construction of buildings by builders.
Manufacturing equipment – this equipment are required for manufacturing products
Corporate aviation – airport and on-flight equipment fall in this category.
Automobile and allied industries – involve assembling and parts manufacturing of automobiles.
IT and office equipment – servers, computers, projectors, etc. required in the office.
Electronic and appliances – other electronic equipment required for the functioning of the company.
Health and care – The healthcare industry requires certain equipment such as a dentist’s chair.

Benefits of Financing your Equipment

1. Maintain Cash Flow – Equipment financing is a source of funding that lets you hold onto your cash or working capital, so it can be used for other areas of your business, such as expansion, improvements, marketing, or R&D.

2. 100% financing –With equipment financing, you have the ability to finance the complete solution, including equipment, software, installation, training, maintenance, and other services into a single transaction. Companies can also upgrade equipment or add services throughout the term.

3. Keep up to date with new technology – Leasing, loans, or another financing often enables you to acquire more and better equipment than you could have without financing. Certain leasing finance programs can also allow for technology upgrades and/or replacements within the term of the lease contract.

If you are looking for equipment financing then you must first find out what kind of equipment you are willing to finance.

If you’re in need of finances for expanding your business, I would suggest taking the credits from us.

apply for a equipment financing loan