Equipment Financing 101

What Is Equipment Financing?

Financing equipment is one of the most common reasons a small business owner might seek out a loan. It is used to buy commercial equipment from computers to machinery to construction equipment and even software. Equipment financing allows businesses to acquire the equipment they need without taking all the money out of their cash flow.

Oakmont Capital Services focuses on commercial equipment financing and has for over 20 years. But is financing right for your business? Let’s explore how financing commercial equipment can be beneficial for a small business owner from a cash flow and asset standpoint.

There are typically only two reasons why a business might need financing:

• Your business needs a new (or used) piece of equipment as services are being added or volume is increasing; i.e. you’re taking on more work.
• You need to replace a piece of equipment that’s past its prime or you need newer technology; this may also include a trade-in opportunity.

Should You Finance Your Equipment?

Not every business owner has the cash flow to purchase a piece of equipment outright, and that’s where equipment financing comes into the equation. Additionally, some business owners choose financing to conserve their cash flow for unexpected expenses that may arise. Typically, our customers seek 100 percent financing for a piece of machinery they’ll use for the long-term. By obtaining a loan, our customers can extend their capital with a monthly flat payment instead of a lump sum. At Oakmont Capital Services we also offer flexible payment options including seasonal, skip and delayed payments, making it easier for customers in certain industries to make their payments when cash flow is steady.

When applying for an equipment loan, there are several factors that go into a loan approval, including the amount borrowed, interest rate, and term length (typically 60 months). The amount of money you’ll be eligible to borrow depends on the type of equipment you’re purchasing, whether it’s new or used and your credit history.

Equipment financing allows you to quickly get the money you need to purchase equipment and keep your business running. With the streamlined application process via electronic documentation at Oakmont Capital Services, our customers can secure a loan quickly – sometimes within 24 hours which does not require a down payment. By getting approved for a loan, purchasing equipment, and adding assists to your business, you’ll increase your chances of obtaining a loan or line of credit in the future. As a bonus, per Section 179 of the tax code, small businesses can write off equipment purchases each year, enabling tax incentives and improving cash flow.

Curious about rates on a new piece of equipment? Quickly calculate your rate here.