Purchasing equipment for your business assets requires a substantial investment. When you need equipment financing, dealing with a bank can be an exhaustive process. Banks have many business requirements and often deny borrowers.
If you do not meet their credit score and employment history requirements, banks will not offer a funding option. No matter the reason you cannot get a conventional loan, we are here to help you obtain equipment financing for your business.
What Is a Hard Money Loan for Equipment?
Hard money loans are short-term loans with much easier terms than conventional loans from traditional banks and credit unions. Because these loans are secured by your equipment, you will not have to worry about putting up personal collateral.
When you need a fast financing option for construction projects, a hard money loan provides rapid relief. Although the percentage varies, you can expect to receive around 75% of the value of the equipment. You may even be able to receive funding on the equipment you are still paying on to another lender.
Typically, the payments on hard money loans are for interest only. At the end of the term, you will pay a balloon payment for the balance. Many investors use these loans to help them get out of a financial crunch.
Understanding Equipment Financing
With hard money equipment loans, you can purchase the equipment you need, whether it be tractors, backhoes, bulldozers, or other machinery. Hard money lenders offer financing on hard money equipment loans, along with leasing and sale-leaseback solutions for real estate investors.
Because the business equipment purchase stands as collateral, you will not have to worry about extensive checks on your financial stability, as these are considered asset-based loans. The process of getting approval for equipment financing is fast and stress-free.
One of the biggest advantages of equipment financing is the fast turnaround on the business loan amount. Small business owners can get approved and funded much faster than other collateral loans. With fast approval, you can purchase the equipment you need today and begin using it tomorrow to increase cash flow.
EXAMPLE LOAN SCENARIOS
Understanding Equipment Leasing
When you cannot get approval for business loans, leasing equipment is a sound option. While leasing is not for everyone, it can positively impact your cash flow and business balance sheet, allowing you to operate your commercial real estate investment company more effectively.
The following types of leases are available to help investors obtain the equipment they need. Research these equipment options and learn as much as possible before choosing.
- True Lease
- Early Buy-Out Lease
- Terminal Rental Adjustment Clause
- Rebate Lease
A true lease does not require any down payment. This type of lease is a 100% finance of the equipment.
When you lease equipment, the equipment itself becomes the collateral for financing. With asset-based loans, you will not have to risk your personal assets for the equipment loan.
Many decide to seek an equipment lease because it offers constant access to the latest equipment. Once the lease runs out, you will not be stuck with outdated equipment that no longer satisfies your needs, which is a significant benefit. After the lease ends, you can simply lease new equipment.
Understanding Equipment Sale-Leasebacks
If you own heavy business equipment, you can use equipment sale leasebacks as an option for receiving the money you need quickly. Within a few days, you can get the financing you need without the hassle.
You need to understand how this equipment leaseback works before getting started. You will sell the title to your equipment, yet retain the right to use the equipment daily. You receive immediate cash from the equipment sale, but you continue to use the equipment for your business.
You have the right to continue using the equipment through a rental agreement with the titleholder. With this option, you will have longer terms, increased funding speed, low payments, and lower interest rates on your equipment.
MORE EXAMPLE LOAN SCENARIOS
Understanding Equipment Refinancing
You also have the option of refinancing. If you currently own equipment and are dealing with unfavorable terms, such as a high interest rate, you can refinance your equipment loan for better interest rates and terms. These short-term loans are typically for twelve months and are based on the value of the equipment.
With this financing solution, you retain control of the equipment. Because the equipment is used only as collateral, you will not lose ownership unless you do not pay your loan payments.
Contact Us Right Away for Pre-Approval on Hard Money Loans
Our partners place a high level of importance on helping their customers understand their options. While hard money loans are not right for every borrower, they can help you get out of a financial jam or make an investment purchase. Private lenders offer financing options for those with a bad credit score, low working capital, and insufficient down payment.
Contact our partners today for rapid pre-approval on your loan application. As an equipment loan lender, they are there to answer your questions and help you learn more about your options. Equipment financing will help you get the money you need right away.