Business Equipment: Making The Purchasing Process Painless

June 29, 2017 by CNH Finance, LP in category “Financing”

Every business needs equipment. Whether the business equipment needed is a few workstations, heavy construction vehicles, injection mold machines for plastics manufacturing, or a new CT scanner for a healthcare center, meeting the price tag can be challenging. Fortunately, there is a way to get access to business equipment without breaking your budget.

The Issues With using Loans

Traditionally, business equipment purchases require loans. Unfortunately, bank loans present a number of problems for businesses. First, using a loans to purchase business equipment places debt on the balance sheets, and locks entrepreneurs into fixed payment schedules. In addition to the initial cash outlay to purchase the equipment, businesses must repay the total amount of financing, plus interest, which can place a big strain on finances. Second, loans impact credit ratings. Having your business credit score lowered in order to purchase equipment can force you to put off larger growth-focused projects. However, there is a way to get the equipment you need without so many strings attached.

Using Asset Based Lending For New Business Equipment

Asset based lending is the alternative for equipment financing. Asset based lending offers all of the flexibility that business owners demand, with none of the debt or impacted credit ratings. Asset based lending, as the terms implies, is structured around assets owned by a business. The value of items such as vehicles, property, inventory, receivables, and more are used to create a revolving business line of credit. The line of credit can be used to purchase new business equipment, without having to go in debt. What is more, business credit ratings are preserved, so entrepreneurs can stay focused on growth projects for their companies.

New Equipment Yields Better Financing

Since owned business equipment is considered a fixed asset, it also has an intrinsic monetary value. When entrepreneurs use asset based lending to purchase new business equipment, the machinery, tools and vehicles acquired are assessed. After the analysis, the new value is used to increase the amount of financing available to the businesses through asset based lending. In a sense, using asset based lending to purchase business equipment promotes growth through an increased revolving line of credit.

Get The Business Equipment You Need

At CNH Finance, we provide working capital solutions for businesses through asset based lending. Whether you need to purchase new equipment, want to complete growth-focused projects, or simply desire an extra source of working capital without debt, we can help. Contact our team of experts today to get started.

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