Commercial Truck Finance

How To Take Advantage Of Equipment Financing And Truck Finance?

Arranging finance for a business is not easy. It is especially difficult for new companies that do not have any track record of doing business. Most institutional lenders require lots of documents, security or collateral, and guarantor before they lend any business loan. Borrowing loans for business is somewhat more difficult than borrowing money for personal reasons. Sometimes businesses need specific type of finance. When faced with these issues, most companies now prefer equipment financing which is a better solution.

It is important to know that equipment financing can mean different things to different people. It can be a simple loan borrowed to buy an equipment. Some dealers provide financing at their level. It means the buyer does not have to go through a commercial lender. In this arrangement the sale of equipment is financed by the dealer. The buyer pays the down payment and then keeps paying balances. Once all balances have been paid off then the borrower becomes the owner of the equipment. Lease option is also referred as equipment financing.

Equipment lease is a unique solution. Under this contract, a business rents machinery, vehicle or any other equipment. There is no need to borrow money. A business can keep using the leased equipment as long as it wants. The ownership of equipment remains with the leasing company or financial institution. The company leasing the equipment can continue to use it as long as it pays the rent. This financial solution is an excellent way to bring down the total cost of expensive equipment, vehicles and machinery.

Equipment financing is available for a wide range of equipments and machinery. From computers, heavy machinery, office equipments, photocopiers, vehicles to light jets, everything is available on simple monthly payment. Businesses operating in construction, telecommunications, retail, printing and publishing, manufacturing, healthcare, food and any other industry can take advantage of this type of financing. Even service firms operating in law, insurance or any other sector can use equipment. Small businesses regularly take advantage of these financing options.

Businesses that use right tools and gears can compete successfully in their industry. This is possible only when they use equipment financing to obtain the tools, equipment, vehicles, furniture and software they need. When products are purchased outright then it is difficult to dump it if it becomes outdated. There is no such problem with leased equipments. A company can simply discontinue the lease of old equipment and lease latest model of the required equipment.

Equipment finance can also be used to finance a new truck. The advantage of this truck finance option is that there is no need to make a large upfront investment. It means more cash remains in the hand of business owner. It results in better credit rating. Cash is available for operational expenses and other investments.

There is no issue of costly maintenance in case of truck lease. There is no mileage limitation with the open ended leases. The contract can be terminated earlier after the first year of lease without paying any penalty. The business does not have to pay any penalty for excessive wear and tear of the vehicle. There are some restrictions related to liability and mileage usage with the closed end leases. There is wider coverage beyond the normal wear and tear of vehicle.

It is because of these benefits that so many businesses continue to use equipment financing. This way they are able to improve their profits and business prospects.