CEOs and CFOs have to ensure their competitive drive is top-notch to stay afloat in today’s saturated market. This is where equipment financing comes into the mix. From established businesses to new startups, there is always a need for more money to run smooth business operations.
However, small and medium-sized businesses often run into a fourth wall when it comes to financing equipment. In fact, most companies need some type of financing to pay for software, IT equipment, or rendered services. The good news is that businesses can finance a wide range of equipment through equipment financing.
Equipment Financing: How Exactly Does It Work?
Equipment financing is a lease that a business can acquire and use to purchase equipment. The lease structure can come with a lien on the business assets or some type of personal guarantee. Ideally, business owners should take some time and review the terms and conditions of the agreement to understand the underlying risk.
What You Can Finance through Equipment Financing
In terms of software, businesses often purchase security software, CRMs, or collaborative work software. Similarly, companies can buy services such as a setup and installation package. Predominantly, businesses choose equipment financing to purchase standard IT equipment such as phone systems, server arrays, laptops, and audiovisual equipment.
On the other hand, businesses can buy warehouse equipment, manufacturing equipment, pharmaceutical equipment, biotechnology, and even medical testing equipment. In fact, the list of items you can buy through equipment financing is a long one.
Let’s look at the essential equipment you can finance for your business in 2021:
As a CEO, the last thing you want is to be left behind in a tech world. You can upgrade business software, servers, security systems, telecommunication systems, phone systems, computers, and laptops through equipment financing. You can even secure several equipment financing options to ensure consistent tech upgrades throughout your business and continue to make low payments over time.
Usually, purchasing new or used heavy equipment can take a toll on a business’s finances. Your business can avoid that toll by financing heavy equipment and purchases such as large-scale 3d printers, excavators, signage machines, and much more. In heavy equipment financing, businesses pay monthly fixed payments.
Storage and Manufacturing
Although storage and manufacturing assets differ from business to business, you can finance many types of products. For instance, companies can finance lathes, packaging assemblies, grinders, CNC machines, industrial coolers, and machine presses.
Typically, manufacturing firms need a wide range of equipment and assets to produce sufficient goods and store those goods safely. But you don’t have to be a manufacturing company to finance customizable packaging hubs or refrigerated storage rooms.
Whether you’re a CEO or CFO of a small business, it is crucial to replace, upgrade, or obtain equipment on economic terms. After all, these necessary pieces of equipment allow firms to take care of day-to-day tasks. Buying expensive equipment can negatively impact your business’s cash flow, which is why it makes all the more sense for companies to opt for equipment financing to ensure optimal business operations and performance.