How to Get the Most Out of Heavy Equipment Financing
Based on the type of business owner you are, there comes a time when you will require heavy equipment and machinery to get the job done or transport large items from one location to another. The issue that business owners experience is that heavy equipment is expensive to purchase or rent, irrespective of whether it is new or used. This is where financing or leasing comes into play. If you want to rent or purchase heavy machineries like a construction tool or tractor and require heavy equipment financing, you cannot go wrong with the Top Link Loan and Leasing professionals.
What is heavy equipment financing?
As mentioned above, most heavy machinery and equipment is costly. However, there are various ways to make it reasonably priced. The most widely considered approach is through heavy equipment financing. It is nothing but a lease or a loan where the business owner pays off the equipment cost in instalments. But as a business owner, you must be aware of the different financing options, as they have their benefits and drawbacks. Regarding heavy equipment finance in Mississauga, Top Link Loan and Leasing offers affordable options. Contact our professional and friendly team to find out more details.
How does heavy equipment financing work?
Taking a loan or a lease out on business-related equipment is commonly referred to as equipment financing, such as vehicles etc. When a business takes out an equipment loan, they are obligated to make scheduled periodic payments that include interest and principal over a fixed period. As collateral for the loan, the lender will keep a hold on said equipment. Once the loan has been paid in full, you become the rightful owner of the equipment. Additionally, the lender may also impose a lien on other business assets, in some cases your assets, if you give a personal guarantee. It is important to carefully review the terms and conditions before taking out a heavy equipment loan.
Pros of heavy equipment financing in Canada
One of the ideal ways for businesses to invest in the capital while maintaining their cash flow and balance sheet is through equipment financing. It allows companies to buy equipment or machinery by avoiding the many uncertainties that come with purchasing new equipment. Below mentioned are things to keep in mind when financing heavy equipment:
Cash is important after taking a look at your balance sheets carefully, you can get an idea if you purchase the equipment outright or if you would need to look at financing options based on your business’s current financial condition. When all your funding options are exhausted, you use your business capital as a viable financial lifeline for your business.
Renting vs owning
Renting equipment is similar to renting a home. You have no equity in the equipment. If the equipment has a short shelf life, then it makes sense to rent it out. However, if you decide to purchase the equipment because of its long shelf life, you can even sell it after a couple of years.
If the equipment needs are short-term, then renting is the best alternative and vice-versa. It is important to keep in consideration the usage frequency of the equipment when deciding to rent or purchase.
Equipment financing has certain benefits. The financing expenses of a lease or loan payment become operational expenditures. It is ideal to consult your accountant to see where you can save money for your business.
For heavy equipment financing in Mississauga, you cannot go wrong with Top Link Loan and Leasing. To book an appointment or for further enquiries, get in touch.
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