All small business owners know the importance of swiftly and economically obtaining, upgrading or replacing any type of equipment that is required to perform various daily tasks. Purchasing equipment outright often puts a significant strain on the cash flow of small businesses. Hence, it would always be a better option to seek out equipment financing solutions from companies like Sertant Capital. Equipment financing helps companies to acquire the assets they need to meet their increasing demands and perform in an optimal manner, without hampering their cash flow.
Equipment financing simply refers to a loan that is used for the purchase of any business-related equipment, such as a copier scanner, a pick-up truck or a restaurant oven. According to the professionals of Sertant Capital, these loans provide for periodic payments over a fixed span of time that includes principal and interest. This California based equipment financing company has both experience and expertise needed to deliver ideal customized funding solutions to discerning clients in a fast and hassle-free manner.
When it comes to the security for equipment financing loans, the lenders usually require a lien on the equipment as collateral against the debt. Once the loan is paid in full by the entrepreneurs, the equipment acquired by them shall be free of any lien. In certain cases, an equipment financing loan may also require a personal guarantee or a lien imposition upon additional business. However, as per the professionals of Sertant Capital, as long as the entrepreneurs pay their debts in time, they would not have to face any kind of problems.
While many people think that equipment financing is the same as equipment leasing, so is not the case. Both of these processes are actually quite different. In case of equipment leasing, entrepreneurs basically pay periodic rent to the owner of the asset for its use, over an agreed-upon period of time. Unless the entrepreneurs reach on an agreement with the owner on renewal terms or a buyout at the end of the leasing period, they shall have to return the equipment. In most cases, the qualifications required in leasing equipment are much less stringent than that for financing. However, in case the equipment is vital to the business operations of the entrepreneurs, the endless payments made to renew the lease might prove to be a more costly option. Hence, it is better to opt for equipment financing than leasing, if the asset in question is a vital one.
Most lenders look at the personal credit score of the entrepreneurs prior to approving their loan. The higher the credit score of a person, the greater shall be their chances of credit approval. People with better credit score might get to enjoy better loan terms as well. Apart from the credit scores, the lenders may ask entrepreneurs for their business plan and a well-defined proposal for future goals. Through such documents, the lenders try to ascertain the growth prospects of a business.