A Quick Guide On Transport Equipment Finance
Let’s face it: transportation equipment is expensive. Purchasing and paying upfront is nearly impossible, which is why business owners in the transportation sector always try to find the right financing plan. With transportation equipment finance, your chosen lender agrees to lend the amount you need to buy new equipment, so the financial burden of purchasing big transportation equipment is lessened. This lets you run your business while giving you enough time to increase your sales, save up, and repay the loan. If this sounds like something you can use, we’ll talk about its benefits and the options you can choose from. Continue reading this article to learn more about transport equipment finance.
What are the Benefits of Financing Your Transport Equipment?
Acquiring transportation equipment directly can have a large impact on your business’s working capital. But with this financing solution, you have the flexibility and opportunity to preserve capital and expand cash flow. By saving cash on larger purchases, you can then focus more on other areas of your business that need your attention.
Other benefits include the following:
No Collateral Required
Compared to regular business loans where lenders require you to put up personal or business assets as collateral, this isn’t the case with transport equipment financing. Lenders usually assess the equipment you want to buy and make that as collateral for the loan. If you default on your transport equipment finance agreement, they will repossess the equipment to make up for the loss.
Fast and Easy Application
With alternative lenders, the application process is as easy as possible. You can easily apply for an equipment loan by completing a short form and we’ll then submit it to different lenders. They’ll usually respond within 24 to 48 hours and once approved, you can sign the contract and get your money.
Easily Upgrade Your Equipment
Equipment leasing (which we’ll talk about later) makes upgrading your equipment fairly easily. For example, when your lease agreement ends, you can simply renew your contract and lease a different piece of equipment.
Transport Equipment Finance: What Options Do You Have?
Just like buying a vehicle for personal use, transport equipment finance offers you two options: buying and leasing.
These involve borrowing a lump sum of money from the lender. It’s like a multi-year loan, except you can only use the money to purchase equipment. Equipment loans are used to ease the burden of these large purchases by making smaller installments throughout the loan period.
As mentioned, the equipment itself serves as collateral for the loan. This makes qualifying for the loan very accessible and the chance to get the right equipment to get the job done without burning a hole in your pocket.
On the other hand, this transport equipment finance option is where you borrow equipment from an equipment financing company—it’s essentially like renting equipment. You make payments to the financing company to use the equipment, giving you access to expensive equipment without making a large purchase. Better equipment makes the job easier and faster, therefore improving your operations’ quality and productivity.
By the end of the term, you have three options. First, you can end the lease and give the equipment back to the company. You can also extend the terms of the lease and continue making payments or you can offer to pay the difference to buy and own the transport equipment completely.
So is transport equipment finance the right option for you? Well, it depends on your business’s requirements. Do you need a loan to finance transport equipment purchases or to shoulder day-to-day expenses? Remember that truck and trailer financing is strictly for buying or leasing transport equipment. So if you have sufficient funds to shoulder the monthly overhead costs of your business and only need help with purchasing equipment, then go for it. But if you need financial assistance with areas other than buying equipment, we think applying for a business term loan or a business line of credit might be a better choice for you.
MHF: Your Transport Equipment Finance Brokers
Transport equipment financing is an attractive solution for business owners because of its flexibility. Application is easy and getting approved is fast since there’s no need for additional collateral. Many tax benefits come with equipment financing too, such as monthly payments being tax-deductible, which means getting financing will not only benefit your business today but also in the long run.
As a leading brokerage company, MHF Finance has teamed up with major banks and non-bank institutions to help you find the perfect lender. We consider your goals and requirements to find a suitable lender that will meet your criteria. Contact our team today and let us fulfill your transport equipment finance needs!