Equipment Loans are including in some of the prime essentials of business multipliers. A vigilant and dynamic business leader can not overlook the changing global tend in technology. The sustainable growth in business depends on not only other factors quality, quantity, management, marketing but also investment on equipment. Planned and controlled debt management is an effective tool in equipment financing. A smart loan management team in an organization can do this job intelligently.
Equipment loans amounts can vary from thousands to million of dollars. It is dependant on credit review of the borrower. Equipment loan financing includes business IT or computers, hardware, software, vehicles, furniture, electronic technology, tools, lighting fixtures etc. Beside the value of the equipment to be required, loan’s amount also depends on the borrower past credit score, payments track record, projected revenues and cash flow in the balance sheet.
Usually, borrowers click on a merchant account advance or accounts receivable loan in equipment financing. Merchant credit account gives the borrower access to working capital without the headaches of bank loan. The investor feels debt free. Accounts receivable financing offers a debt and tension free option to the investors. By this way, small businesses get working capital without the condition of the loan or repayment.
Equipment loan is an agreement between lender and borrower. Experts suggest that, in many cases, commercial equipment loans is productive than other forms of financing such as leasing. We can summarize the benefits of equipment loans as:
1. It is easier, and equipment to be needed is to be the collateral
2. Low obsolescence risk reduces the future tension of buying new equipment that is after down payment borrower becomes the owner of the equipment purchased.
3. Tax relaxation attracts the borrowers to opt for the equipment loans. It writes off the depreciation of these equipments.
4. Lenders offer easy installments and flexible repayment structures. It saves the clients from credit crunch, ease burden on budgets controlling team.

In financial market, some banks and credit companies offer attractive packages to the borrowers. For instance, some lenders offer the investor to take advantage of deferring the principal payments for six months; to pay interest only for first six months of the loan term; to choose a variable or fixed interest rate; loan term can be up to six or seven years; minimum loan size range form $10,000 to $15, 000 and maximum depends upon credit review.

Loan or Leasing Financing

We can describe the pros and cons of equipment loans and Leasing as:
1. Loan financing makes the borrower as the owner of the equipment vis-?-vis leasing, but in leasing the lessor will take the risk of equipment obsolescence.
2. The balance sheet shows the equipment as a fixed asset in loan financing, not so with leasing.
3. In a credit crunch, flexible lease payments is a relax, and provides breathing room to the borrower; the down payment and deadlines for a repayment always create credit problems to borrowers.

Getting any sort of loan can be cumbersome for a business. That’s why it is important for all businesses to consider heavily whether obtaining additional financing is necessary.

Equipment loans,
Equipment loan

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