Ways of Equipment financing for empowering Small Construction Business
In the construction business, getting the right equipment financing solution to fund the heavy equipment is necessary for keeping the operations going on. The heavy equipment is important to success but the cost will be brutal for bearing. Where the equipment financing can be found: Construction equipment can be financed from banks, credit unions, equipment manufacturing companies, supply companies etc and also from other independent and online lenders.
There are mainly three types of equipment financing options, they are:
1. Equipment leasing
2. Equipment loans
3. Small business loans.
The type of construction equipment should be confirmed before choose any financing source and option. Here is a description about the ways how the small construction business can get the equipment financing.
Most of the small businesses need equipments for operating and growing their business and each of the businesses has to decide on an addition strategy which may be right for it. According to the ELFA or Equipment Leasing and Finance Association, small construction businesses can get full financing in equipment, reducing the down payment and clearing up the cash.
And it is seen that the most of the construction businesses turn for the equipment leasing and financing for taking advantage of many benefits. And ELFA has highlighted five main benefits which have made the equipment finance a beneficial option particularly to the small businesses:
1. Getting total equipment financing without any down payment will allow the business to hold on to cash or working capital and then can be used it for other directions such as, financing project start-ups, development, changes, marketing or R & D.
2. Equipment financing stops the ownership risk and also help a startup business with the certain investment with a capital asset till it attains the desired return. There are certain advantages like increasing efficiency, reduced costs or meeting with other business objectives.
3. A businessman has to be always up-to-date with new technologies for the cutting edge and should be competitive as sometimes businesses need access to new technology. Small business get help from leasing, loans and other financial help for better technology and equipment that they couldn’t have gotten without financing. The businesses those use lease financing can easily avoid the owning risk of archaic technology and equipment as many agreements are allowed for easy and fast equipment updates.
4. There must be the planned expenses for the flowed cash and business cycle variations. This equipment financing helps in budget by setting the customized rent payments for matching cash flow.
5. The accessibility of product and service bundling should be obtained. Some definite financial products allow businesses for financing the whole cost of equipment with the installation, up-front maintenance, training and software charges.