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Equipment financing is aimed at businesses and helps them purchase or lease the tools, machinery and work vehicles they need to keep business flowing smoothly.
Although some smaller trucks can be financed with a common car loan, larger ones, such as class 6, 7, and 8 vehicles can technically qualify as heavy business equipment, and can, therefore, be financed using different methods, in this case, an equipment loan.
Although terms and conditions may vary from lender to lender, you would normally have to apply for what’s known as a “secured” loan, wherein collateral is necessary in order to be approved. Here, the equipment itself would act as the collateral and your lender would retain its title until you’ve fully paid off your loan, including any interest and fees.
If all goes well when you apply, a lump sum of liquid money will usually be deposited directly into your business bank account. You would then use said money to purchase or lease whatever truck(s) you want, then repay what you’ve borrowed through divided installments, often over several years. Certain lenders may also offer the option to transfer the capital directly to whoever is selling the truck.
Equipment loans can be helpful in many ways, especially if you’re looking to finance something as expensive as one or more trucks. Nevertheless, it’s extremely important to consider all the benefits and drawbacks of this type of financing before you start applying since they can affect the health of your business.
Remember, equipment loans come in all shapes, sizes, and costs. Make sure to shop around, do research, and compare lenders so you can find the most cost-effective source of financing for your business. You should also check online to see Canada’s top truck models or, if necessary, to locate second-hand vehicles in your area.
Generally, however, there are a few ways you can qualify for a sizeable truck equipment loan with a decent interest rate and repayment plan, including but not limited to:
Whether you’re expanding your business, delivering cargo, or hauling building materials to a construction site, a reliable truck can be a major benefit to your operation and so can the Loans Canada network. If you’re in the market to purchase a truck, we can help find you the best financing.
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