From the Author
We often get this question with our new (and sometimes returning) vendor clients. In the following article, we break down the process for getting equipment financing and answer some common questions that come up about it.
Equipment financing can vary from one transaction to another. In some cases, it may not be ideal to generalize the equipment financing process. The good news is that even if each transaction differs from one to the next, you can follow a process to get the best financing for you. A simplified process will help you understand a lot of the nuances and intricate details of equipment financing.
Simplified Step-By-Step Equipment Financing Process
v Step 1 – The Need to Finance a Project
First, determine whether or not you can finance the project and establish if your purchase is eligible for equipment financing. Most purchases will qualify for financing, and you won’t have to worry about the limitations of financing options. In fact, there are endless financing options in software, hardware, tech, storage, and manufacturing.
v Step 2 – Review of Quoted Project
Once you establish the basic parameters of the project with your financing partner, you can apply for equipment financing. Information you need to provide can differ from lender to lender, and from one financing source to the next. In any case, the finance company will review your quoted price of the project, and help you to find a financing term that fits your needs.
v Step 3 –Evaluation of Financial Information
Once the lender meets with you to understand your needs, the financial institution will review and analyze your financial information. After assessing the financial data of the buying company, the financial institute drafts the proposal for financing.
v Step 4 – Signing the Proposal after Approval
After the review and approval from the finance company, the buying company just needs to sign the proposal for financing. Once signed, the finance company will collect final documentation and send it to you for review.
v Step 5 – Returned Documentation Leads to Funding
After the return of the final documentation, the finance company allocates funds for the required equipment and the fixed payment period starts for the buying company. Note that this funding happens once the equipment has been delivered to the purchasing company.
If you intend to invest in brand new equipment, you can look into various options to drive business growth. Ideally, you should make sure to compare various small business loans and stick to a simple application. Finding the most suitable equipment financing options allows businesses to move forward in the right direction.
Blue Street Capital
Here at Blue Street Capital, we aim to provide you with the most up to date information on the financing industry so that you can become an educated buyer. Should you have any questions about this article, or any other information related to the equipment financing industry, please feel free to reach out to us using the contact form below. You may also give us a call at 714-316-1180.