Equipment Financing -

Aligning your business needs to your company’s financial resources is the key to success. Purchasing equipment outright can put substantial strain on your cash flow. Equipment financing may be the ideal solution to keep your business functioning at optimal performance or expand to meet increasing demand.

When the time comes to add to or replace existing equipment, careful consideration should be given to the purpose, use, and the length of time the equipment will be needed. With this in mind, a critical decision has to be made about financing. There are two ways to finance the equipment to buy or lease. Financing equipment with a term loan spread the equipment’s cost over a specific (fixed) time frame with equal monthly payments. Once the last payment is paid, the company owns the company outright. There are several advantages to this type of financing. However, the drawback is the size of the down payment the business owner must provide to complete the transaction.

Leasing equipment also requires monthly installment payments for the contracted period the equipment is leased. The company does not own the equipment and must extend the lease or return the equipment at the end of the contracted period. There are downsides and upsides to leasing. Payments continue as long as the equipment is in use unless the contract stipulates that ownership is transferred to the company after a certain number of payments and other terms and conditions are met. The upside is the equipment can be upgraded with little or no increase in monthly payments.

Market conditions, including availability, interest rates, and other factors, may make it challenging to select the financing options best suited to the company’s fiscal health. That is why consulting K-WAM Financial Solutions professionals to match your needs with the best available choice is your best option. For additional information, send a message to our team, Click here.