What to Consider When Exploring Heavy Equipment Financing Options
Time, energy and resources are a must if you’re looking to expand your construction company. And when it comes to funding, heavy equipment financing is definitely one of the best paths you can take. But before you commit to a specific provider, you need to look into a few basics.
Your Financial Status
Defining your business’ present status is your first job prior to seeking financing. Numbers are where it should boil down to: how many years have you been in business and what’s your credit score? What about your cash flow? And the rest. You have to be as empirical as you can. Lenders focus on numbers as their key basis for accepting or rejecting your loan application.
Types of Heavy Equipment Loans
While there are many financing companies to choose from, their offers can be unique and based on different metrics. Thus, it’s important to explore every one you receive before deciding it’s right for you.
Exhaust your options and give yourself time to study them carefully. Before making your final choice, do an apples to apples comparison. Be sure to cover such vital issues such as the terms of the agreement; the total amount you pay the vendor, including freight, taxes, etc.; your total final monthly payment and whether this is tax-inclusive or tax-exclusive; how many payments you need to make and the percentage you have to pay down up front, including doc fees, titling fees, etc.; and the buyout at the end of the agreement.
Seeking Advice from Local Businesses
Talking to local businesses is one of the simplest ways of finding a good heavy equipment financing provider. If you know a particular construction company that is of good repute and is not your direct competitor, they may have useful pointers to give you based on their own first-hand experience. After all, it’s always best to hear it from people who themselves have worked with the financing provider you might be eyeing.
Financing Rates
On top of a financing firm’s reputation, you need to know the costs entailed by your heavy equipment loan. Committing to anyone with knowing all the details is a disastrous idea.
As you go through the rates for heavy equipment financing, take into account your credit status, the down payment you have to make, the total price of the equipment and the equipment’s age, and how long you’ve been in the industry.
When you have such crucial information sorted out, you will find it easier to make educated decisions related to heavy equipment financing. If you’re planning to buy out early, make sure get their pre-payment policy in black and white or at least in an email.