Frequently Asked Questions About Equipment Financing

Equipment financing is an amazing tool to help your business, but that doesn’t mean you have to dive in headfirst. There’s nothing wrong with asking questions and learning more about the details. If anything, the more you know, the easier it is to choose terms that are a great fit for your business’s needs. Equipment loans and leases are versatile, and they can adapt to many different types of monthly payments, rates, and terms. Discover the answer to common financing questions right away.

Does Applying for Equipment Financing Affect Your Credit Rating?

Every lender does things differently, but there’s no reason equipment loans or leases need to affect your credit. You can prequalify quickly and easily with basic business information. The final application may require a soft credit inquiry, but this doesn’t impact your credit score. Soft inquiries are merely to confirm your business’s credit score, nothing more.

What Credit Rating Do You Need To Qualify?

This is another area where lenders have significant flexibility. Traditional loans are strict with credit score requirements, often asking for excellent credit. Equipment financing is different. You can often qualify with fair credit or scores of around 600.

Some lenders also provide bad credit equipment loans. These lenders are willing to work with companies that have credit issues, including past bankruptcy if the business has a good cash flow to make payments regularly. Alternative lenders can decide whom they want to work with and are often willing to “bend the rules” when they partner with capable entrepreneurs and small business owners.

How Much Financing Do Equipment Loans Provide?

Every equipment loan’s terms are customized to your business’s needs. Some loans finance 100% of purchase prices as well as soft costs such as installation. The total down payment depends on the terms you need.

Do Equipment Loans Cover Construction Equipment?

Equipment loans cover almost any type of business equipment. This includes small-to-medium purchases and large-ticket items as needed. Construction companies can get funding for backhoes, loaders, skid loaders, compacters, compressors, bulldozers, dump trucks, and countless other types of equipment. Healthcare businesses can purchase diagnostic equipment, treatment tech, specialized software, office furniture, and other business equipment.

Transportation companies can take advantage of equipment loans and leases, also. For example, owner-operators can purchase semi-trucks using this option. Fleet managers can get trucks, tools, lifts, and diagnostic systems for company garages. These are just some of the options for a huge variety of industries.