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Whether you are in Kitchener, Ontario or Saskatoon, Saskatchewan, starting a business is an increasingly popular way for people to make a living. Being your own boss allows you to set your own hours, be in control of when and how you work and allows you to control your financial future. That freedom with the ability of the internet and technology to assist business owners makes starting a business easier now than ever.
However, if you plan to start a business, you likely need some equipment. While some equipment can be found affordably, many pieces that you might need can be quite expensive. Most new entrepreneurs simply don’t have the money necessary to make these types of large purchases in cash.
Thankfully, equipment loans in Kitchener and nearly every other city across Canada can make it easy for your company to get the equipment that it needs.
What is an Equipment Loan?
An equipment loan in Kitchener is exactly what it sounds like, borrowing money from a lender to purchase the equipment your company needs. These loans are a good option for new entrepreneurs looking to start a new venture, but can also be used by existing businesses to purchase any extra equipment that is needed.
Equipment loans are available from a variety of different lenders including big banks, credit unions, online lenders, and private companies. The rates of these loans will vary depending on things like your credit history and the lender you ultimately decide to work with. The terms of these loans will also depend on what the lender is offering and even the life of the equipment you will be buying.
There is also a chance you may need to qualify for an equipment loan by showing you have a healthy business and decent credit, but this isn’t the case with each and every lender. Also, you may be required to show certain documentation such as bank statements, invoices, tax returns, and other financial documents.
Types of Equipment That Can Be Purchased
Now that you know a little more about equipment loans in Kitchener, what types of equipment can be purchased with them? The good news is, almost anything that your business will need to purchase to thrive and operate successfully can count as equipment. Some of the types of equipment that can be purchased include:
- Restaurant equipment like appliances, chairs, and tables
- Farming equipment like tools, tractors, and fence
- Transportation equipment like trailers and vehicles
- Construction equipment like tools, lumber, and machinery
Companies in nearly every industry can benefit from equipment loans in some capacity. Whether you are a farming company, transportation company, restaurant or a service-related operation, you will be able to use an equipment loan. These loans are quite flexible and can be adapted for nearly every type of equipment possible.
However, just because you can purchase a variety of different pieces of equipment for your company doesn’t mean that you should. You need to be careful not to borrow more than you can afford to pay back. If you do, it could end up negatively affecting your cash-flow. Only borrow money for equipment that is necessary for your business to operate or can guarantee a large ROI.
Equipment Loans Can Be Used to Expand Your Business in Kitchener
One of the primary reasons for people to use equipment loans in Kitchener is to expand their business. Even established businesses, who might be making a lot in terms of revenue, may require a business loan to get the equipment they need. There are many ways that an equipment loan can be used to expand your business, such as:
- Upgrading your old and outdated equipment to optimize your processes
- Purchasing brand new equipment that just released to keep up with your competition
- Increasing your productivity by purchasing additional machines
Expansion of your business is incredibly important and in many industries, this expansion is directly tied to having the right equipment. Sure, having additional debt can be tough for some companies to handle, but in many cases, it will be well worth it because of the benefits this new equipment can provide.
Learn how to increase your profits by reducing business expenses.
Benefits of Choosing Equipment Financing
You might be wondering why someone would specifically choose to go with an equipment loan in Kitchener over a standard loan. Well, there are a couple of reasons. First of all, you will be working with experts that understand not only the industry you are in but also the needs of your company.
These lenders will also be aware of your budget and know the best solution for you, instead of simply providing general advice. Because of their expertise and how quickly they will be able to help you find the right solution, choosing equipment financing will often get you the equipment you need much more quickly. This will ensure you can get right back to work as soon as possible, and not lose as much potential revenue.
Another great benefit of equipment loans and financing is that they can often come with customizable repayment plans. These equipment lenders know that the business cycle is very real and there will be ups and downs for your company in terms of revenue. Instead of having consistent payments every month, many lenders will allow you to pay more when you have excess money, and pay less when you don’t.
Of course, not all lenders or equipment loans will come with this benefit, so be sure to talk to your lender ahead of time and see.
Using Your Equipment to Borrow Money
Just like you can use an equipment loan in Kitchener to borrow money for new equipment, you can also use your equipment to borrow money. Lenders will be more willing to offer you better interest rates of higher loan amounts the less risky you are. Putting up some of your equipment as collateral is a great way to put less risk on the lender, which they will certainly appreciate.
You can leverage your vehicles, your machinery, your farm equipment, or other large and valuable commercial assets to ensure you have enough money to operate. All of this will help you save money in the long term, as long as you can be sure to pay the loan off on time and in full.
This secured loan can get you some much-needed funding to help your business grow and succeed. The money from the loan can help you do a variety of things, such as:
- Hire and/or train some new staff members
- Invest more money into your marketing efforts
- Offer more products and services
- Improve your office or retail space
However, always be aware of the risk of getting a secured loan of any kind. If you decide to use your equipment as collateral for a loan, you need to do so incredibly carefully. If you miss your payments and end up defaulting on your equipment loan, it could have serious consequences for your company.
The lender would be able to seize the asset or assets that you put up for collateral, in order to make back what they lent to you. In many cases, losing that vital asset or piece of equipment could stop the growth of your company. While you should always be careful when borrowing money, this is especially true with an equipment loan.
The Right Equipment Loans for Your Needs
If you’d like to learn more about equipment loans in Kitchener or are interested in applying for equipment financing for your business, don’t hesitate to reach out to Loans Canada. We look forward to hearing from you and being able to help you out.