The business world has become highly competitive. With everyone trying to get ahead of one another, there comes the need to equip your business with latest and advanced equipment. No matter if your business is new or some years old, it is important to replace the old equipment with new ones. However, money is an important factor as the replacement process is often quite expensive. But now, you don’t have to worry anymore to stay ahead in your business. Business equipment loans are there to relieve you of all your worries. Here’s everything that you need to know about it:
The most important question that arises when you consider taking a loan is that, ‘How much will the loan costa you?’
It depends on various factors. Some of them being-
- Credit score of the business
- Credit score of the business owner
- Creditworthiness and so on.
The benefit of having a good credit score lies in the fact that usually, the interest rate for equipment loan is 5% to 9%, but if you are having a good credit score you can get an advantage here.
Apart from interest rates, one should take care of other charges. For example, there is origination fee that varies from one lender to another. It should not be too big.
As far as the repayment part is concerned, the repayment term depends mainly on two major factors-
- The shelf life of the equipment that you are buying.
- Type of equipment and its cost: The usual time period allowed to repay the loan is 1-5 years. However, in cases where heavy industrial equipment is involved, the duration is allowed to stretch for up to 10 years.
Down payment is a crucial part of every loan. Since it is the most sought-after business loan, you are required to put down a down payment. This again depends on your creditworthiness. Most lenders ask for 20%, but this can be reduced to as low as 5% if your business creditworthiness is very high.
These are a few points that will help you figure out why you should consider opting business equipment loan:
- Hassle-free process with less paperwork.
- No collateral needed.
- Quick processing.
- Less stringent requirements.
It is undoubtedly the most efficient and smartest way to enhance your business performance and ensure success. You can always contact us to know more. We are always available at your service.