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Commercial Equipment Financing Options for Businesses

Reduce the upfront financial burden of replacing business equipment by accessing available equipment financing options. This refers to using a loan, line of credit, or lease to obtain equipment for a business purpose. All businesses have equipment needs, and whether it’s titled vehicles, industrial, construction, furniture, or landscaping equipment, there is an equipment financing option available for you. Check out this complete list of equipment financing options and how they stack up against our limited time Equipment Loan Special Offer!

Equipment Loan

Business equipment loans are specifically for business-related equipment purchases and can be found at a bank or equipment and leasing company. Typically, borrowers can finance up to 100% of the equipment’s value at annual percentage rates (APR) from 8% to 30% percent and a repayment period up to the life of the equipment. With our limited time Equipment Loan Special Offer, you can take advantage of rates as low as 3.99% APR* to secure 100% of the financing you need on your new equipment over five years with no prepayment penalties! A down payment of up to 20% is typically necessary, allowing for a faster turnaround. This will enable you to purchase what your business needs quickly because the loan is secured with the equipment, reduces risk to your lender, and allows room for small to large businesses to qualify. With our limited time special offer, you can also secure a competitive rate on 100% of the financing you need!

Term Loan

A term loan or “traditional” business loan is technically working capital that can be used to purchase necessary business equipment. These let you borrow a lump sum of money up to $1 million to make your purchase and repay on a fixed or variable rate for a medium or short-term. With these loans being working capital, additional collateral other than equipment may be required, such as a personal guarantee or a UCC blanket lien for lender insurance and risk mitigation. This makes these loans better for a more established business looking to purchase equipment for more than $250,000 because this is where equipment loans typically cap out due to their favorable terms. Term loans can be approved and dispersed in as little as two business days for those in need of quicker funding and have a willingness to pay loan fees, which can include origination, underwriting, and packaging fees, plus collateral or personal guarantee requirements.

Business Line of Credit

A business line of credit allows a business to borrow cash as needed instead of a lump sum, ideal for smaller companies or those with little revenue. Funds up to an approved limit, usually between $10,000 and $2,000,000, can be repaid and borrowed again with interest charged only for what you borrow, like a credit card. These annual percentage rates (APR) can range from 7% to 36%. The requirements for a business line of credit can also vary, as lenders may consider personal and business credit scores, financial statements, the business’s industry, and annual revenue. However, approval and funding on a line of credit can be as quick as two business days, making it ideal for covering the cycle of your business’s ongoing equipment needs for as long as you are willing to be in debt.

SBA 504 Loan

SBA 504 loans are administered by a Small Business Administration (SBA) lender, such as a bank or credit union, and secured by the SBA meant to finance the purchase of fixed assets such as machinery and real estate. These loans have longer terms of up to 25 years and amounts of up to $5 million for equipment loans and generally lower interest rates. In addition, these loans provide the option to use the equipment you’re purchasing and equipment you already own as collateral. Due to their favorable terms, high amounts, and lower rates, these loans are among the most desirable and take a bit longer to obtain. The approval process and funding can take an average of five to eight weeks with a paperwork-intensive application process and a list of requirements. These loans can be highly beneficial for those qualified and able to wait out the process.

SBA 504 Loan Requirements Include (but are not limited to):

  • A good personal credit score
  • Strong business finances
  • Operating in the U.S. or its possessions as a for-profit company
  • Having a tangible net worth of less than $15 million
  • Reporting an average net income of less than $5 million for the last two years

Are you looking to finance an equipment purchase for your business? Take advantage of our 3.99% APR* 5 Year Commercial Equipment Loan and other equipment financing options when you contact the commercial lending officers at Mechanics Cooperative Bank today!

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