Nowadays, people do not apply for a loan to banks because they know the lengthy and stressful process of loan application provided by leading banks. Non-professional behaviour and delay due to unnecessary reasons are some of the common issues that you can face in every bank, and they can reject your loan application for any reason. For this reason, industrialists rely on the leasing equipment process and they take their heavy equipment on lease to run their business. As a result, they also sell their products at a high price to make their profit. But why normal people suffer for such negligence of banks?
Today, you can avail equipment finance from private lenders and you do not need to wait for a month to approve your loan. Securing low interest rate on equipment finance is a challenging task, and you need to search the best deal online. Now, you can apply online for equipment finance and you do not need to pay recurrent amount for leasing your heavy machinery.
Steps to choose the best Equipment Finance company:
- Apart from banks, you can also apply for the equipment finance from non-profitable financial organizations or credit unions. For example, if you want to buy some equipment for your business situated in America then you can apply for the machinery finance to U.S. Small Business Administration. They can provide you a short -term loan for purchasing new equipment at less interest rate. But, the eligibility criteria and qualification standard of such loans are quite complicated and strict. You must have a good credit score to secure your business loan from such associations. Plus, lenders will check your personal and business credit history before disburse the loan. You need to invest personal assets in your business and you need to secure your loans with some collateral. Such associations or credit unions do not approve your loan directly and they can give you business loan through banks or NBFCs. It is easier to get equipment finance from these credit unions, and you can save your taxes by availing such loans. You do not need to pay any tax on their interest.
- Non-bank loans are also known as alternative loans. You can apply for equipment finance online. There are some private lenders available online that can provide you equipment loan at less interest rates. They can provide you more flexible loans with floating interest rate. Plus, they can approve your loan faster than banks or credit unions. But, make sure that you must check their interest rate and other hidden charges. Most of these private lenders can charge you with higher rate of interest and they can also include some hidden charges like processing fees, foreclosing charges, high insurance premiums and some add-on facilities.
- Small businesses can easily secure short-term equipment finance from banks and credit unions. But, purchasing heavy equipment can be difficult because you need huge amount for purchasing such expensive tools. In this case, you need to search some lenders who are specialized in heavy equipment loans.
Equipment Finance with a Bad Credit score:
It is quite impossible to secure an equipment finance with bad credit score because your low credit score will give a signal to the lender that you may not repay their loan on time. Either you cannot find a lender or you need to a pay higher rate of interest for such loans. Apart from that, lenders can add frequent payback schedule in your loan and you need to pay them weekly or daily.
However, if you want to borrow small amount with a bad credit score then you can easily borrow it from some private lenders available online.
