Capitalize Loans

Equipment Financing for Small Business

As a business owner, understanding the importance of having equipment for a business to succeed is critical. This includes everything from heavy machinery, kitchen equipment, trucks and office equipment. Having the right equipment isn’t usually enough, but having the latest, best equipment in your industry is the difference between success and failure as a business owner. 

How Equipment Financing Work

As an equipment financing broker, Capitalize loans provides working capital so business owner’s don’t have to stay up at night wondering how the equipment will be purchased. The process of obtaining a equipment financing allows you to purchase the equipment with payments over time, similar to an auto loan.

 

Equipment leasing, on the other hand, gets you the equipment without having to own it. Usually business owners lease equipment when they only need it for a few days or a project. You’ll make regular payments to continue using the equipment as if it were your own. Generally, you can renew your lease if the equipment is in good condition and still helpful to your business. 

01
Submit Single Application
After you submit your application, one of our underwriters will reach out to you within the same business to discuss your options.
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02
What's Best For You
Your underwriter will work closely to determine which small business funding option will help you achieve your goals without compromising cash flow.
03
Receive Funding
Once your funding option is determined, you funding can be approved and deposited within 24 hours.
04
Repay
Terms are set in advance so you know what to expect and can plan accordingly.

Why Equipment Financing Benefits Small Businesses

Regardless of the size of the business, financing important equipment to grow your business will enable you to have a competitive advantage. The terms of equipment financing can be flexible enough to allow you to meet your company needs. In fact, equipment financing option covers tools and resources for almost all industries that utilized equipment.

Equipment Financing Covers:

  • Solar panels and HVAC units
  • Food trucks, delivery vehicles, company cars, and trailers
  • Appliances like telephones, refrigerators, coffee makers, and more
  • Software, including operating systems, CRMs, accounting programs, and more
  • Forklifts, workbenches, and conveyor belts
  • Point-of-sale payment processing software and hardware
  • Commercial ovens, grills, deep fryers, freezers, food processors, and more
  • Office furniture and fixtures – everything from cubicles and desk sets to rugs and lighting

Better Cash Flow for Less Work

A benefit of equipment financing is the fact it’s great on the business’s cash flow. Since large equipment purchases typically take out a substantial amount of money from your cash flow, you’ll be able to have breathing room with operating your capital. 

 

Additionally, the equipment loan process is very quick and simple, unlike SBA loans and traditional bank’s process. This cuts down your time away from the business, since everything is handled online and over the phone.

Equipment Leasing vs. Equipment Financing

The major difference of leasing versus financing equipment is the ownership of the equipment. An equipment lease allows you to rent out a piece of equipment for as long as you need while paying daily, weekly, or monthly payments towards the vendor. On the other hand, equipment financing is a collateralized loan which allows you to finance an equipment. Once the equipment is paid in full, you are a full owner of the equipment. 

How Does Leasing Equipment Work?

When it comes to leasing equipment, you don’t own the equipment outright. Usually a lender buys equipment from a vendor which rents it out to you for a monthly payment. Some pieces of equipment do have the risk of becoming old and unusable. That is why it’s important to do your due diligence and consider leasing a piece of equipment that has the potential to be obsolete in the future.

A major advantage of equipment leasing is the impact on your business’ cash flow. It has low impact against your cash on hand which enables you to venture into new opportunities with your cash. Instead of putting a down payment or collateral against the equipment, this leaves room to payoff expenses and more funding into your business for growth. 

Operating Leases

Operating leases have low monthly payments and provides the business owner the choice to own the equipment at the end of the lease term by paying its market value. Another term for operating lease is fair market value lease.

Capital Leases

Capital leasing differs from operating leasing due to it’s higher monthly payments and it’s structured more as a loan. Unlike operating leases, capital leasing does not show on your balance sheet during the term of the lease. Once you come to the end of the lease, you have the choice to buy the equipment for a given price, typically 10% of the purchase price. The 10% buyout lease and the $1 option lease are popular examples.

Benefits for Equipment Financing

Easier to Qualify

Equipment loans are easier to qualify unlike lines of credit or traditional term loans. As an equipment financing lender, Capitalize Loans is happy to consider business owners for equipment financing with bad credit. The reason it’s easier to qualify is because equipment loans are self-collateralized, meaning if the business owner defaults (doesn’t pay) the loan payments then the equipment will be seized. 

No Collateral Needed

Equipment loans are self-secured, at Capitalize Loans we will never ask for collateral on any loan options you choose to apply for. 

Lower Cost

Just like any other loan or financing, you’ll be given an interest rate on an equipment loan in addition to the principal amount. Interest rates for a business equipment loan can go as low as 8%, but can shoot up to 22%. This all depends of the bank statements you provide. 

Benefits for Equipment Leasing

Flexible Terms

Many lease agreements provides the business owner with options after the lease has ended. For example, you’ll have the choice to:

  • Buy the piece of equipment outright you’ve been renting from the lender.
  • Continue to lease the same equipment
  • Return the equipment to the lender
  • Trade in your current piece of equipment for a new equipment lease or an updated equipment that’ll benefit your business.

No Down Payment or Collateral Needed

An equipment lease generally does not require you to put money down or collateral to secure a piece of equipment. This gives you the ability to keep a good flow of cash to contribute to your business’ expenses while not risking any of your business or personal assets as collateral. 

Quick and Simple Application Process

At Capitalize Loans, we make our process extremely user friendly. With our 4 step process, you’ll be assigned your personal underwriter that will guide you through every step. Including, how much you’re looking for and the terms for your business. Unlike the traditional banking process, we only ask for your last 3 monthly bank statements with a completed application, which you can find right here!

Minimum Qualifications for Equipment Financing

Capitalize Loans is an equipment financing broker that evaluate risk and credit worthiness in a different manner than traditional banks. We take into consideration that credit shouldn’t be the only qualification to receive funding. We start off by requesting your last three monthly bank statements to look at the daily credit card receipts and deposits.  This is to determine if a business can repay the advance in a timely manner.

FICO® Credit Score

500

Qualify in an instant with no impact on your credit score

Monthly Gross Deposits

$10,000

A minimum of $10,000 in gross deposits must show in your last three business bank statements

Time in Business

6 months

Business has been fully operational for at least 6 months

LET’S GET STARTED

Apply for Equipment Financing

After filling out our single application, you’ll get to speak to one of our dedicated advisors to take the time to get to know your business and help you understand your small business funding and repayment options.