What to Consider When Exploring Heavy Equipment Financing Options
Taking your construction company to the next level demands energy, time, and resources. And when you talk about funding, heavy equipment financing is doubtlessly among the best steps you can take. But before choosing a provider, there concrete issues you should consider.
Your Present Financials and Stats
Knowing where you business currently stands is your first task before seeking financing. You can only rely on numbers for this one: how long have you been in operation and what’s your debt income ratio? What about your cash flow? And the rest. You need to be as empirical as possible. Lenders focus on numbers as their key basis for accepting or rejecting your loan application.
Kinds of Heavy Equipment Loans
Various financing providers can make various offers using their own metrics. Therefore, you have to carefully review each one you get before deciding it’s the one you want.
Leave no stone unturned and give yourself enough time to know and understand each option. Compare your choices apples to apples before settling on one. Be sure to cover such vital issues such as the terms of the agreement; the total amount you pay the vendor, including freight, taxes, etc.; your total final monthly payment and whether this is tax-inclusive or tax-exclusive; how many payments you need to make and the percentage you have to pay down up front, including doc fees, titling fees, etc.; and the buyout at the end of the agreement.
Local Business Advice
Among easiest ways of finding a good heavy equipment financing company is to consult local businesses. If you know a particular construction company that is of good repute and is not your direct competitor, they may have useful pointers to give you based on their own first-hand experience. After all, nothing’s better than hearing it straight from those who have worked with the financing company you may be considering.
Besides knowing a financing company’s reputation, you should find out how much you have to pay for a heavy equipment loan. Committing to anyone with knowing all the details is a disastrous idea.
As you check out rates for heavy equipment financing, take note of the price, the required down payment, the age of the equipment, the number of years you’ve been in business, and your credit standing.
The moment you have all these things sorted out, making smart decisions with regard to your heavy equipment options should be a lot simpler. If you’re thinking of an early buyout, be sure to get their pre-payment policy in formal written form or at least sent to you through email.