Can you believe it? This decade is two months from ending! With that being said, have you thought about how you are paying for your new heavy equipment? If you have not, no worries, we are here to help you! Did you know that there is construction equipment financing? We’ll tell you about financing and what to look out for.
First things first, there are things you have to be aware of! Here are five things you should not just believe, do your research first. The first one is that financing rates start at 4 percent. Although it can be true, it’s VERY rare. Companies are quick to mention the lowest rate possible but not mention a more realistic rate. The second tip we have for you is to make sure the quoted price is the actual price you are paying. The chances of you paying what was quoted is dependent on your credit score. The higher the score the lower your rate is.
The third tip we have for you is to do your own research, make sure the seller is who they say they are. It’s common that they tell you they own equipment when in reality they don’t and they just want your money. One good way to determine this is looking through company reviews. Next, the fourth tip is to thoroughly read your contract! This can not be stressed enough, look for hidden clauses that say that your contract will automatically roll over for a year.
Last but not least, don’t believe everything you read. “Leasing is better than renting” is not true! Every heavy machine is different, research and talk to the seller.
If you are not sure if you want to finance a heavy machine, you might want to look into leasing. The biggest difference is that the ownership. If you have an equipment lease, you are renting business equipment and paying a monthly payment. During the time of your lease, you do not own the equipment. Construction equipment financing is taking out a loan which helps you pay off the equipment. After you pay off your loan, the equipment is yours.
Are you the type of person who likes to own things? If you answered yes, construction equipment financing is perfect for you! A good place for you to look for financing is a traditional lender, which is a bank. This is a good option because they have good rates and terms compared to online lenders.
A good way to get large equipment is with good credit, it means you will have lower interest rates. Also, a large down payment would help! Are you a new business with no credit score? Here are tips for financing large equipment. Get references, it shows that you and your business are trustworthy. You can also show off how much money you make, if your bank account shows that your net income is twice as much as the payments, this will give lenders more of a reason to trust you. If you do have credit, but it just is not good, you should save up and put down a larger down payment, this can sometimes help the lender believe that they will get their money back.
So you have made your mind up, you want to finance. But are you wondering if all equipment can be financed? Below is a list of machinery that can be financed.
- Skid steers
- Concrete equipment
- Farm Equipment