What is equipment financing?
Equipment financing is an assist-based loan type for small businesses. It was designed to aid in the purchasing of machinery and the necessary equipment needed to run your business. The loan can assist in the purchase of anything from a cargo van to commercial vehicles to other types of commercial trucks.
Equipment financing can help any business owners build their businesses. TopMark Funding can help in the financing process. TopMark specializes in the trucking industry and offers a range of financing options. We can help with things such as semi-truck financing and semi-truck leasing.
Pros to equipment financing
One of the biggest advantages of equipment financing is that it helps you grow your business with new equipment.
Plus, you don’t need any collateral besides the asset itself. You can increase the scale of your business while spreading out large working capital costs.
Equipment ownership is another advantage, once the loan is paid back, the equipment is yours. The tax-saving component behind this is exponential. At tax time, the interest you’ve paid is deductible, and you may also qualify for a depreciation tax benefit. Make sure you speak to a tax professional to learn more.
Additionally, since payments are fixed for the entire term of the loan, and adjustments are made in advance to account for future inflation, this means the net cost will decrease, while gross revenues generated by the equipment increase.
- Grow your business
- Spread out costs over time
- Equipment ownership
- Tax savings
- Competitive interest rates
- Fixed rates
Cons to equipment financing
The biggest disadvantage is that the funds can only be used for equipment and occasionally, other associated soft costs. Additionally, you may have higher rates compared to other types of financing. You can also expect a higher down payment upfront, this is due to the high-risk, high-reward nature of this type of financing. However, working with our expert financial team, together, you can come up with the perfect financing solution.
- Limited control of spending
- Higher rates
- Down payment
Where to get equipment financing
In the trucking industry, good credit and credit histories are highly valuable, but they are not the end all be all. Based on the type of business loan, financing plan, and type of lender, this can vary. The three main types of lenders for equipment financing are online lenders, banks and credit unions, and SBA lenders.
Online equipment financing companies, such as TopMark, can offer a range of benefits to their customers. Most online lender works best for established trucking companies, but sometimes have financing programs for start-ups and even businesses with challenged credit.
Online lenders have access to equipment financing with more flexible qualifications than a traditional bank or SBA loan. TopMark also offers streamlined application processes and fast funding — sometimes funding loans within 24 hours.
Banks and credit unions
Banks and credit unions typically offer equipment loans with the most favorable interest rates and term conditions. With this comes strict eligibility requirements. Requirements include strong personal credit (700+), several years in business, and excellent financials. If you can meet these rigorous requirements then this might be the best option for you.
Some banks and credit unions have a business division that focuses solely on this type of financing. They offer a range of equipment in a range of different industries.
An alternative to traditional banking would be working with an SBA lender. SBA or Small Business Administration loan is a long-term equipment loan with low-interest rates. SBA loans allow you to use the equipment you’re purchasing and equipment you already own as collateral.
To qualify for an SBA loan, you’ll need a good personal credit score, 690+, and strong business finances.
If you have any questions, look no further TopMark Funding can help. We specialize in equipment financing.
We offer several financing programs for customers that have good to great credit, with flexible payments, low down payments, no hard inquiries, and no impact on your business or personal credit.
Making smart choices with equipment financing is critical to any company. TopMark has made the funding process quick and easy so you can get funded fast. Work with our team of financial and credit experts to build the perfect financing program for you.
Reach us at (866) 627-6644 and one of our equipment financing specialists will contact you as soon as possible to go over your truck financing needs and learn more about you and your equipment financing goals.
ABOUT TOPMARK FUNDING
TopMark Funding is a top-rated semi-truck financing and trailer financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.
We’re not here for the short-term, we’re on the long-haul with you!
Learn more about Trailer Financing.
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.