If I had to guess, you’re likely here because you’re looking into equipment financing options for your painting business. Perhaps you need an SBA or a line of credit, but you’re also in need of some money to finance all of the equipment needed. Whatever the reason, starting and running businesses require money and you may not always have all the funds needed immediately.
In our modern economy, there’s an endless amount of loan options and lenders available to those in need of extra cash. And with all of these options, it can become a little overwhelming when it comes to figuring out the ones right for you. You’ll see ones like startups, SBAs, business lines of credit, personal loans, and even equipment financing.
So at the end of the day, it can be a pretty daunting task to take on while also running a business.
While I’m sure you have a pretty good idea on what equipment financing covers, I’ll give a brief summary for those who don’t know what it fully entails. So equipment financing is relatively straightforward; you can get computers, chairs, desks, tools, vehicles, storage, and so on as long as it’s equipment for the business.
This essentially makes it one of the easiest loans to receive since the equipment itself becomes the collateral.
However, with equipment financing, financial institutions typically like to see the Three Cs: Credit, Cash Flow, and Collateral. For credit, they like to see a score of +660. But keep in mind, they look at scores between 600 – 800. As for cash flow, they look at your tax returns and monthly/annual revenue. And finally, for collateral, it’ll be whatever you offer up in case of a default. Luckily, you only need one of the Three Cs in order to qualify for the loan.
So, should you get equipment financing for your painting business? The pros and cons.
Pros of Equipment Financing:
Equipment financing is quick and easy to get.
There’s very little paperwork involved when applying for equipment financing.
The equipment is the collateral in the worst case scenario of a default.
It is a tax deductible.
Keeps your working capital maintained so you can put your money into other areas.
Equipment financing does wonders for your business credit score (as long as you pay everything on time).
As long as you’re consistent and on time with payments, the APR is relatively low.
Cons of Equipment Financing:
Equipment may be old or outdated by the time you finally pay off all of the debt from the loan.
Even if there’s a value drop in the equipment, you still must pay the original amount (plus interest) back to the lender.
It can possibly require a substantial down payment depending on the lender and what you get.
Ultimately, it’s up to you whether you want to get equipment financing; however, it’s a great and relatively easy way to get equipment. In most instances, it’s a great option for your business.
Finance Factory factory offers quick and easy equipment loans for painters looking into equipment financing.
Finance Factory has a team of highly trained professionals who guide and educate clients so they can make the best and most informed decisions possible when looking at loans. They help you every step of the way and give you all of the information for your application. Their specialty is making and building relationships between small business owners and vetted lenders while offering great rates and affordable terms for everyone.
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!