Financing a big piece of equipment your business needs to keep moving forward can be difficult, especially if your company is relatively new and hasn’t built up a long credit history. That’s why it’s important to understand all your options when considering how to bring in that new asset. It doesn’t matter if you’re talking about a vehicle for transporting items between your shop and a customer, custom-built machines that bring you unique opportunities to increase efficiency, or something integral to growth like a bigger anodizing tank. Here are three ways to fund that acquisition without relying on traditional bank loans.
SBA Loan Programs
The Small Business Administration has long made it a mission to provide loans for small businesses that are trying to grow and thrive in various industries. The programs they have set up are vital for many companies who do not have the two years of operating history needed for traditional bank loans, and they’re designed to simplify your overhead so you can focus on reinvesting the return on your purchase until your company matures and you cement your share in the marketplace.
Leasing and Equipment Financing
Financing companies are also fast to step in, with leasing options available for many common pieces of equipment and even some uncommon ones. The upside to financing this way is the elimination of many add-on expenses like installation and removal. The downside? You don’t actually own the asset, which can be a long-term ROI issue on core pieces of machinery with long operating lives. Still, many do offer a lease-to-purchase option that will get you what you need now, with an opportunity to hold on to it at the end of the lease.
If loans and leasing aren’t an option, revolving credit lines can often provide you with a path to purchasing that is accessible at any stage of growth. Unlike credit cards, many credit lines with cash draws are large enough to provide you with access to equipment right away, and they’re also reusable when you pay the balance down, so you can use them as scaffolding while you scale up your operation and build the record needed to obtain other loans.