Understanding Equipment Financing

To be a fully functioning business it is important to keep your equipment up to date. This is often easier said than done, as most business equipment can hold a heavy price tag. Regardless to if you operate a medical practice, restuarant or construction company, Equipment financing could help you get the up to date equipment you need without breaking the bank.

What is Equipment Financing?

Equipment financing can be a loan or a lease of the equipment. Both of which are great options for growing businesses. An equipment loan allows you on average 4 to 7 years to make monthly payments with interest, at the end of the loan term your business owns the equipment. An equipment lease is similar to a rental, your business makes a monthly payment for the equipment for an average of 2 to 4 years, at the end of the lease term you can turn in the equipment or purchase it at a discounted rate.

Loan vs. Lease

Both loans and leasing have their benefits to businesses. It is important to research both before deciding which is best for your business.

Equipment loans allow you to make low monthly payments on equipment. At the end of the lease term your business has full ownership of the equipment, having generated an asset. The interest paid on the loan is possibly tax deductible.

Equipment leasing often holds a much lower monthly payment than a loan. Along with the low monthly payment you are not responsible for most repairs made the the equipment. At the end of the lease term you can simply walk away from the equipment and go with something more up to date. Equipment leasing is often tax deductible, saving many businesses a large chunk of change during tax season.

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  • Unsecured Loans up to $150,000
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