Are you ready to accelerate your business’s growth? As an aspiring entrepreneur, you understand how having the appropriate equipment can make all the difference. Whether you want a stylish embroidery machine or a skid steer for your landscaping project, equipment financing is your key to success.
But where should you start? A Google search for “how to qualify for equipment financing” will yield useful information on what you need before applying, but what should you do before entering into an agreement?
In this blog, we’ll walk you through the basic mistakes people often make when opting for equipment financing:
1. Not understanding your possibilities
With banks approving only 30% of credit applications, are they really your best option? A common mistake is not determining which lender will provide the finest approval. Equipment financing is available from a variety of sources, including finance corporations, credit unions, and captive financing. You can boost your chances of receiving money by working with a specialized equipment financing lender.
2. Not knowing your lender
Do not apply for equipment finance without first studying the lender. If you are unfamiliar with a potential lender, here are some excellent ways to assess their reputation:
· Check their Google reviews.
· See their Better Business Bureau rating.
· Check out what customers have to say about them.
3. Unrealistic expectations
Understanding how your credit quality affects your monthly payment enables you to set reasonable expectations. Lowering your credit risk lowers your financing costs, and vice versa.
4. Using rate tunnel vision
Consider the affordability, profitability, and entire cost of the transaction rather than just the rate. If you have a low rate but a longer term, you may end up paying more than if you had a higher rate over a shorter period of time.
5. Not balancing cost and cash flow
Choosing a term that is too short saves money but comes at a significant cost to your cash flow. Work with your lender to identify the amount that will provide you the most cash on hand.
6. Not insisting on having it in writing
Do not cut corners. Avoid lenders who provide “verbal” quotes and instead have everything printed.
Get your financing arrangement in writing so you know exactly how much you’re paying and when it’s due each month.
7. Not knowing what you can easily afford
Consider how much money you can put down while still keeping enough on hand for emergencies. A break-even calculator can also help you assess how many jobs you need to accomplish to meet your monthly payment.
Conclusion
Whether you want to finance a tow truck or industrial heavy equipment, knowing what typical pitfalls to avoid is critical. Remember to vary your search beyond typical banks and choose a trusted equipment leasing company in Abbotsford. Sandhu & Sran Leasing & Financing is the name to trust when it comes to equipment financing, truck loans, commercial leasing, machinery loans, and others. Contact us to know how we can help you with your leasing goals.
