The Ultimate Guide to Fast Equipment Financing for Small Businesses
We understand that finding the right equipment financing solution for your business can be challenging, especially if you’re looking for fast funding. That’s why we’re here to help you find the best equipment financing options that meet your business needs.
At BitX Funding, we specialize in providing fast equipment financing solutions to small and medium-sized businesses across various industries. Our team of experts has years of experience working with businesses just like yours to help them secure the financing they need to grow and succeed.
What is Equipment Financing?
Equipment financing is a type of loan that helps businesses purchase new or used equipment, vehicles, or machinery. This type of financing allows businesses to obtain the equipment they require without having to pay the full amount upfront.
Instead, businesses can make monthly payments over a period of time, which helps them manage their cash flow and maintain their financial stability. With equipment financing, businesses can access the latest technology and equipment without having to worry about the high costs associated with purchasing it outright.
Why Choose BitX Funding for Equipment Financing?
At BitX Funding, we understand that each business has unique financing needs. That’s why we offer a wide range of equipment financing options tailored to meet your specific requirements. Our financing options include:
- Equipment Loans: This type of financing allows businesses to purchase new or used equipment and make monthly payments over a set period of time.
- Equipment Leasing: With equipment leasing, businesses can rent equipment for a set period of time and make monthly payments. This option is ideal for businesses that require equipment for a short-term project or do not want to commit to a long-term purchase.
- Sale-Leaseback Financing: This type of financing allows businesses to sell their existing equipment to us and lease it back. This option is ideal for businesses that need to free up cash flow or want to upgrade their equipment without having to purchase new equipment outright.
- Working Capital Loans: Our working capital loans provide businesses with the cash they need to cover unexpected expenses or take advantage of new opportunities.
Equipment Financing vs. Equipment Leasing: What’s the Difference?
Two common ways to finance equipment are through loans or a lease. While both achieve the same ends — giving you access to the equipment needed to run your business — there are plenty of differences between the two methods. Here’s a rundown on each:
An equipment loan is taken out with the express purpose of purchasing equipment. Typically, the equipment secures the loans — if you can no longer afford to pay the loans, the equipment gets collected as collateral. These loans are useful for business owners who need a piece of equipment long-term but can’t afford to purchase it outright. A lending institution might agree to extend most of the capital so that you can pay in periodic increments.
There are a few downsides to this arrangement. Most lending institutions will only agree to pay 80%-90% of the cost, leaving you to cover the other 10%-20%. The other downside is that, in the long term, the arrangement will ultimately cost more than if you had just bought the equipment outright—the cost of borrowing changes depending on the amount borrowed, interest rate, and term length.
For this reason, it’s essential to do the math before accepting equipment loans. Equipment loan interest rates can vary wildly depending on your lender (7% – 30% is a highly rough range for what you can expect). Your credit rating, the amount of time you’ve been in business, and any number of other arcane formulas a specific lender decides to apply to your case. In most cases, equipment loan interest rates are fixed rather than variable.
Leasing equipment is a popular option if you need to trade out equipment frequently or don’t have the capital to pay the down payment required for loans. It’s also more likely to cover additional soft costs associated with shipping and installing the equipment.
Instead of borrowing money to purchase the equipment, you’re paying a fee to borrow the equipment. The lessor (the leasing company) technically maintains equipment ownership, but lets you use it. Lease arrangements can vary depending on your company’s needs.
Most commonly, merchants enter a lease agreement if they periodically need to switch out their equipment for an updated version. If you want to own the equipment, some lessors offer the option of purchasing the equipment at the end of the term. Leasing generally carries lower monthly payments than loans but might be more expensive in the long run. In part, leases tend to be more expensive because they carry a more significant interest rate than loans.
There are two significant leases: capital and operating. The former functions a bit like a loan alternative and is used to finance the equipment you want to own long-term.
The latter is closer to a rental agreement, and, in most cases, you’ll return the equipment to the lessor at the end of the lease. Both types have numerous variations. Here are a few common types you’ll come across:
Fair Market Value (FMV) Lease:
With an FMV lease, you make regular payments while borrowing the equipment for a set term. When the term is up, you can return the equipment or purchase it at its fair market value.
$1 Buyout Lease:
A capital lease where you’ll pay off the cost of the equipment, plus interest, throughout the lease. In the end, you’ll owe exactly $1. Once you pay this residual, which is little more than a formality, you’ll fully own the equipment. Aside from technical differences, this type of lease is very similar to loans in terms of structure and cost.
10% Option Lease:
This lease is similar to a $1 lease, with the option to buy the equipment for 10% of its cost at the end of the term. Additionally, these leases have lower monthly payments than a $1 buyout lease. While leases are generally more expensive, their interest rates are usually fixed and fall within the same range as equipment loans.
Depending on the agreement, you may be able to deduct the cost of the lease from your taxes, and unlike loans, leases don’t appear on your records in the same way. However, the impact of leases on your taxes is complex and beyond the scope of this article. It’s important to consider the type of lease you choose, as it determines what you can write off and how.
How to Qualify for Equipment Financing?
Although every lender has different specifications, here’s the standard pricing most lenders have.
- Business must be in business for one year
- Have a minimum of 600 on your credit score
- Revenue $100,000 > annually
You can still qualify for the small business equipment financing if you don’t meet these requirements, as we have already mentioned that the lender’s terms and services vary. Typically, getting equipment loans is easy compared to equipment financing.
How to Get Equipment Financing Fast?
You’ll find several options while searching for equipment funding solutions like banks, traditional national lenders, and online lenders. At least a bank must not be your favorite option if you have an average credit score and business history. Also, you inevitably go for the option that provides full support with loan repayment terms and conditions.
Here’s BitX Funding can be the right option for equipment financing as they’re experienced in their game and have already helped thousands of small businesses in need. If your business has the potential to increase, then their great support can help you achieve your dreams.
How Fast Can You Get the Money?
While working with BitX Funding, you can receive money as fast as 24 hours after qualifying.
How Much Can You Borrow?
While working with BitX Funding, you don’t have to worry about the number of loans. You can get a minimum of $5k to a maximum of $5M!
Equipment Financing Pricing
You’ll experience different pricing (depending on the lender), but typically they charge you 7% interest over a 3-year (or 36-month) term. Standard APR is 12%, so your $10K piece of equipment will cost you $11,957.15, with a monthly payment of $332.14.
Our team of financing experts will work with you to determine the best financing option for your business needs. We understand that time is of the essence, and we strive to provide fast funding solutions that help you get the equipment you require when you require it.
How to Apply for Equipment Financing with BitX Funding
Applying for equipment financing with BitX Funding is easy. Simply fill out our online application form, and one of our financing experts will contact you to discuss your financing options. Our application process is quick, easy, and secure, and you can get approved for financing in as little as 24 hours.
At BitX Funding, we’re committed to helping businesses like yours find the equipment financing solutions they need to succeed. With our wide range of financing options and fast funding solutions, we can help you get the equipment you need to grow your business and achieve your goals. Contact us today to learn more about our equipment financing options and how we can help your business succeed.
You can reach a loan specialist by toll-free at 1-800-824-2407 or email at [email protected] or apply online here, and we can guide you on which loans are the best fit for your business.