EXPLAINED: Faster, Easier Access to Equipment Financing

May 11, 2022

EXPLAINED: Faster, Easier Access to Equipment Financing
Business resources

As a business owner, we don’t need to tell you that having the right equipment is vital to keeping your small business running at maximum efficiency and productivity.

But whether you’re in the market for a new pizza oven, forklift, medical machinery, or office furniture, equipment purchases can put a substantial dent in your bottom line.  

In fact, more than 60% of businesses struggle with limited cash flow—making it a challenge to pay for high-priced equipment upfront.

Thankfully, there is a quick and easy way to secure the funds necessary for equipment purchases without decreasing your critical business capital: A small business loan.  

Where Can Borrowers Get Equipment Financing?

There are several options to consider when deciding how to fund your equipment purchase, including SBA loans and bank loans.  

Unfortunately, these more “traditional loan routes” can be difficult to obtain and typically come with strict requirements, intimidating application processes, and long wait times.  

An alternative to traditional lending—and an attractive solution for small business funding—is using an online lender.  

Along with providing quick online decisions and fast access to cash, online lenders offer a number of marked advantages to help your small business grow.  

Additionally, with online lending, you often don’t have the extra stressors that come with traditional lending, such as putting up personal collateral.  

What are the Benefits of Equipment Financing with an Online Lender?

Getting access to additional capital is easier than ever.  

Let’s take a look at some of the fantastic benefits of using an online lender for a small business loan.  

  • Fast, Easy Application Time

Your time is valuable. As a busy business owner, you don’t have time to navigate the often time-consuming and document-heavy business loan process that traditional lending requires. Most online lenders offer a streamlined online application process that takes just a few minutes, putting you one step closer to getting the equipment you need. And applying will not affect your credit score.

  • Quick Approval Process and Access to Funds

The approval process with traditional lenders can take days or even weeks. When using an online lender, experts can immediately review your application and your loan can be approved within minutes.  

This means that your cash may be available the same day you apply!  

  • Preserve Working Capital

Taking out an equipment loan can help improve your cash flow. Rather than making a large payment upfront, financing your equipment lets you spread out the cost into affordable scheduled payments, allowing you to keep cash on hand for payroll, marketing, and other important expenses.  

  • Take Advantage of Tax Breaks

Your repayments can usually be deducted as a business expense. If your purchase is eligible under the Section 179 tax deduction, you can deduct the entirety of the expense in the year of purchase. (We always recommend discussing your situation with a tax professional.)

Common Types of Equipment Financing for Small Businesses

There are two popular options when it comes to securing a fast, flexible business financing solution, each designed to give you worry-free financial security.    

  • Term loans are the most common type of small business loan used by business owners who need quick access to cash for equipment purchases. You receive a lump sum of cash that you repay over a fixed term. A common repayment term is six to eighteen months. Term loans are beneficial for financing one-time expenses and purchasing inventory in bulk.  
  • A business line of credit is another popular type of fast, flexible equipment funding. A line of credit provides borrowers with revolving financing up to a set amount and the funds can be accessed on-demand from an online customer portal. You can take what you need when you need it and pay interest only on the funds withdrawn. A line of credit works best for ongoing operating expenses by giving businesses a constant source of funds to tap into.  

From replacing aging machinery to adding to your present inventory, a small business loan with an online lender will quickly and efficiently help you get the equipment you need to keep your business operating smoothly.  

When you’re ready to transform your next business idea into a reality, Idea Financial provides business loans and lines of credit up to $250k with same-day approval and 36-month repayment terms. To fill out our simple, hassle-free application visit our website today.