Equipment Financing: Small Business Alternative Financing with a Private Loan Lender

Another common reason for getting a small business loan is equipment financing. Equipment financing is borrowing from a private loan lender to purchase machinery or equipment, while using that equipment as collateral. Think of it like buying a new car - you apply for financing for the car, and you usually aren't required to provide any collateral on the loan you will receive. Instead, the car its self is used as collateral. In that way, the loan is secured with property, while at the same time, requires less personal risk to you because you don't have to use any of your belongings as collateral. However, it also means that, should you fail to make a certain number of payments, the car can be repossessed.

The same is true of equipment financing. Let's say that your small business is in need of a printing press. You apply for business financing for the machine, and the machine itself is used as collateral on the loan. Again, this means that you don't have to put anything you already have at risk (other than your business credit rating) and the loan is secured by the printing press. But again, this also means that if you fail to make your payments, the lender can bring your printing business to a halt by repossessing your printing press. When applying for equipment financing, it is important to keep that in mind.  Please contact us for more information about equipment financing and small business financing with a private loan lender.