Financing your equipment purchases
Equipment costs make up a substantial amount of total capital expense incurred by capital intensive businesses. For such businesses, equipment purchases are vital to continuous operations as well as business expansion. Equipment is expensive; thus, financing equipment purchases is a strategic finance decision that requires effective planning and execution.
Investment in equipment aids increased operations and growth, however, access to financing for equipment purchases may be limited or not available in time to aid business expansion. It is therefore important that a business can obtain financing to meet its equipment and other capital cost needs.
Financing equipment purchases may be in the form of equipment financing loan or equipment leasing.
You can finance your business equipment purchases by obtaining a loan. As with other loan types, an equipment finance loan would require interest payments as well as periodic principal payments overtime.
As a form of asset-based lending, existing equipment can be used as a collateral to obtain new financing for additional equipment to support operations and business expansion. Equipment financing also affords the flexibility of trading in old equipment to support financing for new equipment purchase.
At the end of an equipment loan, after all agreed payments have been made, the equipment becomes fully owned by the business.
Equipment leasing entails paying rental fees for the use of an equipment. It provides an opportunity to spread payments for equipment use over time. This form of financing creates a means to match long-term repayments over the long-term use of the asset, thus enabling better financial planning and management.
Financing equipment purchases through leasing introduces operating flexibility. In a lease agreement classified as an operating lease, the lessee does not bear the burden of maintenance or discarding the equipment after its useful life has ended. The equipment is usually leased for the short-term period for which it is needed, which may lead to cost savings in the long run.
Longer term equipment leases allow for usage over the entire useful life of the equipment and the option to transfer the equipment to the lessee (based on specific agreements) after the lease period is over.
Accord Financial, your one-stop solution for Equipment Financing
The method of financing equipment purchases depends on factors such as: specific business industry, operating and working capital needs, stage of business operations and financial situation.
Accord Financial partners with your business to understand your specific needs and offers the best options for financing your equipment. Accord provides financing solutions for business loans targeted towards purchasing equipment. The available financing programs cater to heavy equipment across various industries such as: healthcare agricultural, commercial, manufacturing, construction and industrial, food and beverages, amongst others. There is no better way to fully explore growth opportunities than partnering with a company that understands your business and makes your success its priority.
Equipment financing solutions provided by Accord are flexible, affordable, reliable and structured to help your business succeed. The team of experts at Accord has vast experience in structuring equipment financing solutions for businesses at different stages of growth and operations.