Businesses that require a high level of assets to operate have an additional hurdle to overcome. Especially if they are relatively new companies or have cash flow problems or seasonality.
Because equipment loans are secured by the equipment itself instead of by the borrowers cash flow, the loans are fairly straightforward and come at reasonable terms. Borrowers may be able to borrow from banks on the best terms, however these bank loans are typically very slow and many business owners have opted to use private money lenders.
If you are looking for lenders to finance heavy machinery or equipment for your business, give us some information on your particular situation and we will shop the loan around to the most capable equipment lenders in the industry.
Equipment loans and the SBA
The SBA may be the best place to get a loan for qualifying institutions. The government helps the bank mitigate risk on SBA loans, so they are able to lend on more favorable terms to the borrower. However the SBA process can be a lengthy one. It may be a full 90 days from application to financing of the deal. This is of course assuming your approval.
Because the SBA process is so lengthy, it is typically only utilized in situations where the borrower knows that the equipment or machinery will still be available in 90 days (or a similar piece of equipment)
Alternative financing methods
If you are looking to finance equipment in order to complete an acquisition, there may be easier ways to do it. For instance in our article on business acquisition lenders we outline a number of ways to fund the purchase of a business.