What is Equipment Financing and How Can it Help My Business?

Posted by Marketing Team on May 24, 2018 11:00:00 AM

Financing business essential equipment is a smart decision for the success of any business. Businesses need equipment to operate but may not have the funds to purchase especially if they are a startup. Cash may not be an ideal option for many due to monthly working capital expenses, and credit cards may be maxed out or saved for emergency situations. With simple financing, business owners can make affordable monthly payments while earning revenue on their new equipment. For equipment sellers, it’s an advantage to provide customers with a financing option in case they can’t afford the products or simply just want monthly payments to effectively manage their cashflow.

In this blog, we will provide insight into how the financing process works and the advantages it will have on your business.

What is equipment financing?

Equipment financing is a loan provided by a funding source used to purchase business essential equipment necessary to operate a business. It is a great way to avoid a lump sum payment upfront. Most business owners prefer low monthly payments for capital expenditures, so they can earn revenue while using the equipment. Typically, financing will range between 12- 60 months.  When financing equipment, there are multiple factors that can contribute to how monthly payments are calculated. Here are a few to note:

- Time in Business

- Entity Type (ex. Sole prop, LLC)

- Credit History & Depth (ex. Limited credit lines)

- Liens & Judgements

- Bankruptcy

A business owner could have an excellent credit score but any of the factors above could influence the approval and/or financing terms.


Who Qualifies for financing?

Most businesses will qualify for financing, however it may be challenging for some. By working with multiple funding sources, QuickSpark is able to offer financing to a wide range of businesses with these attributes:

- Startups

- Home based businesses

- Bankruptcies

- Low Credit Scores

What are the benefits of financing?

As an equipment buyer, you can keep lines of credit open for emergencies and use financing to help build business credit. In some cases, businesses can potentially deduct 100% of the total equipment cost through the Section 179 tax benefit. You have the option to pay off your equipment while making a profit and reinvesting in your business!

As an equipment seller, offering financing converts your shoppers into buyers. By giving your customers more payment options, you can not only increase your sales conversion, but also decrease cart abandonment, create upsell opportunities, and expand your marketing reach. The benefits of financing are endless.

Have additional questions about the financing process?  Contact QuickSpark today. We are happy to help.

 

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Check out what one of our customers said:

“We've increased our sales 17% over the first 5 months of rolling out the QuickSpark financing options on our websites with no additional cost. The average order size of financed deals have been 7.8 times greater than a non-leased sale.”  - George S., Cleaning Industry

Check out what one of our customers said:

This equipment helped our bottom line in our case...we doubled our capacity in the salon....more stations...more guests...more profit....who does not want that? - Paul G., Beauty Industry

 

Tags: Cash Flow, Startup Business, New Business, Equipment Finacing, Small Businesses, Marketing Tips, section179, Equipment Seller, Equipment Leasing, Equipment Buyer