Are you looking to take out an equipment loan? Financing equipment can be a challenge. Between finding the right equipment and dealing with contracts, there are so many options to choose from. Before you do so, it’s important to have the right information.
We asked eight thought leaders to share which questions should you be asking your equipment financing company other than “What’s the rate?” to ensure you get the best possible deal for your business.
Look at the Monthly Payment
In addition to the rate, the monthly payment is as, or more, important. Rate is an obvious question and no one wants to pay a higher rate than they have to, but Cash Flow is King. If the monthly payment works for you, and your ROI is satisfactory, then the financing will make sense for you regardless of what the rate might be. The buyout is very important as well. Is my last payment really my last payment or is there a buyout I have to make after my last payment? Better to know now vs. knowing later.
Carey Wilbur, Charter Capital
What Size Companies Do They Support?
If you are a small business owner, make sure you ask “Do you support small and mid-sized businesses?” Some equipment financing companies only prefer working with large enterprises, because they are generally less risky and more profitable. Do your research beforehand to find a company that best fits the size of your business.
Blake Murphey, American Pipeline Solutions
What’s Their Average Turnaround Time?
Make sure you are not going to work with a company that will drag their fit and continuously put off deadlines. After meeting, they should commit to evaluating your application within a day, and upon approval, they should have the funds in your account within a few weeks.
Jonathan Cohen, Generated
What Information Do You Need to Provide?
Ask your financing company upfront what kind of information they need about your company to move forward in the process. This will give you time to collect documents such as profit and loss statements, balance sheets, and bank statements to make sure there are no bottlenecks holding up the process.
Ryan Nouis, TruPath
Know Who You’re Dealing With
Lots of equipment leasing companies will go on at length about the number of satisfied clients they’ve serviced but will be unable to provide actual concrete references to that effect. Protect yourself and your business by requesting the contact information for a cross-section of their current and former clients. Once the information is provided, contact the names and determine for yourself their level of satisfaction with the company. Don’t be afraid to look up the company name on review sites and other internet sources. Doing thorough research now is preferable to paying through the nose on an equipment lease or loan with unfavorable terms or services.
Blake Taylor, Synergy Business Brokers
Ask About Their Qualifications
You should be asking about their credentials and skills. Ultimately, you should be paying the best people to work with who know exactly what they are doing. Their rate may be reasonable but always dig deeper.
Andrew Roderick, Credit Repair Companies
Be Aware of Financing Limitations
It’s important to make sure you’re aware of any limitations on the financing you’re seeking, including if you’re able to purchase from the vendor of your choice, as not all financing companies allow this. You should also inquire about the repayment options, such as how long they’ll allow you to make the repayment in full, ensuring that this is in your best financial interests.
Anna Barker, LogicalDollar
Understand The Loan Guarantee
It’s important to fully understand the terms of the loan. The most important loan term to understand is the loan guarantee. Some lenders will only use the equipment purchased as collateral. However, some may ask you to secure the loan with other business assets or even with your personal assets.
Axel DeAngelis, NameBounce
Always Ask for Options
Never let anyone convince you that you only have one choice in financing your equipment. There are a variety of plans, leases and loans available for businesses with a variety of needs. Make sure you don’t pick an option that’s apparently “one-size-fits-all.” This will help you make the best choice for your company’s needs with the means you have and avoid spending too much.
Aidymar Berrios, Financial Services SEO Company