Today, the construction industry is booming. It is filled with opportunities that can lead to significant revenue. However, the journey towards big profits is usually hindered by lack of adequate cash to purchase the needed equipment to either compete in the market or cope with advancing technology.
This is where construction equipment loans come in. With these loans, you can get the desired machinery fast and easily without disturbing your cash flow or raising capital. Read on to find out if a construction equipment loan is right for your business.
Why you should apply for a construction equipment loan
Construction equipment financing is a great option to help you acquire the machinery or any other equipment your business needs. There are several advantages of construction equipment loans that make them helpful. They include:
- They provide quick access to cash
- The equipment purchased serves as collateral for the loan
- They require reduced or limited paperwork
- With on time payments, an equipment loan can help improve your credit
- You can get a loan even with bad credit.
How construction equipment loans work
An equipment loan can be used to acquire different types of equipment but the amount of the loan you qualify for is determined by several factors including the type of equipment you are looking to purchase as well as whether it is new or used.
Similar to car loans, the equipment itself is used as collateral. This saves you from putting up additional collateral. In most cases the payments you make will be the same every month which makes it easy to plan for the expense of the new loan.
The loan period on the other hand is determined by a couple of factors including the expected life of the equipment; a financier will not be willing to extend the loan period beyond the expected life of the equipment you purchase.
The cost of construction equipment loans
Although you will end up paying more at the end of the loan term, you do not have to pay the entire purchase price upfront from your cash reserves. Therefore, instead of struggling to raise cash at once, you can pay every month for the term of the loan. This is much easier to handle. Also, you can have the assets on your books.
How to qualify for the loan
It is quite easy to qualify for construction equipment loans but you should go to the table well prepared, knowing what will influence your loan application. Some of the factors that determine how much you can borrow include your credit rating, financial statements, value of the equipment as well as the history of your business. Since the equipment serves as collateral for the loan you can obtain a construction equipment loan with a not so perfect credit history.
Choosing a Lender
When it comes to construction equipment loan, choosing a financing source is a critical decision to make. It is prudent to work with one who has experience in the specialty of construction equipment financing.
At Viking equipment finance, we are leaders in financing construction equipment in the USA and Canada. We offer flexible financing solutions for a wide range of new and used machinery as well as other construction related equipment. For many years, our teams of experts have funded a wide range of customer profile needs.
When you contact us, we will guide you through various financing options and help you determine which one will suit you best. Our approval process is fast with a focus on customers that don’t fit the bank credit profile.