How to Get Equipment Financing

There are a lot of benefits to financing equipment, but for many it can also seem like a pretty mammoth venture. Thankfully, being prepared helps reduce the stress of your search. If you go in with a firm plan and follow these key steps to seeking a financing solution, financing equipment can be the smartest decision you make for your business. It can even help you get a leg up over your competition, which in turn can boost your sales.

1. Think About How You Will Be Using the Equipment
Before shopping around for a financing solution that works for your business, sort out what equipment your business needs. Do you need a new printer? Maybe it’s time to upgrade your old heat transfer press. It’s important to identify where your financing will go before spending the time acquiring it. The useful life of the equipment is also a key factor in determining what to look for in a lender. Do you need your heat transfer press for only a year, or is it a piece of equipment that will pay for itself over time? Lastly, doing a quick cost/benefit analysis by estimating how much revenue the new equipment will generate can help you figure out if financing the equipment will be worthwhile.

2. Research and Use an Equipment Finance Partner Who Understands Your Business
This step is critical in the process to finding a good lender. Working with someone who understands your state’s regulations, your market’s fluctuations, and how your business runs and operates is paramount when deciding on a finance partner. Make sure that your lender knows the demands and products of the graphic arts industry. If they know the equipment necessary to running your business and can identify the primary brands and suppliers, they will be better able to keep costs in check and make sure finance terms work for you.

3. Calculate Your Total Payments and Costs
Oftentimes financial contracts can be made up of dense legalese and jargon, so ensure that you understand what each figure means before you sign anything. Speak with your finance partner about total payments, monthly payments and any additional costs (taxes, insurance, etc.). Open communication and thorough comprehension is integral when deciding on your business’ finance solution.

4. Understand the Terms of Your Agreement
Make sure you read over the agreement carefully and understand everything that it includes. If you don’t understand it all, don’t worry! Your finance partner will be able to explain it to you. This includes questions like:

• Will your equipment finance company assume the costs for the equipment’s insurance, taxes and maintenance?
• What are your options at the end of the agreement?
• What procedures must you follow if you choose to return the equipment?
• Are there any extra costs at the end of the agreement?
• Can you pay the agreement off early?

A good finance partner will be happy to answer these and any other questions that may arise during the preliminary steps.

 

5. Close it Out
Once all your questions have been answered, you have a thorough understanding of what your chosen solution means for your business, and you’re comfortable with the terms, sign the deal! You can get your new equipment or equipment upgrades shortly after, and begin reaping the rewards of your savvy investment.

Financing new equipment or leasing equipment is a part of growing your business, and it doesn’t have to be scary. With a more thorough understanding of what’s expected of you and what you can expect from lenders, you should feel more prepared and ready to take the plunge into equipment financing.