Fresno, CA -- (SBWIRE) -- 09/12/2014 -- Initial Considerations
Before we get started applying to lenders, the first thing we want to do is find several lenders that offer commercial equipment financing in our specific industry niche. Since the economic downturn of 2008-09, many lenders have stopped offering financing and loans for commercial equipment claiming that it is too risky. The best thing to do is call around and inquire with enough companies that we can make a list of 5 or 6 that offer this type of financing and loans for comparison purposes.

Basic Credit Qualification Requirements
The lender has to determine how creditworthy we are and that we will have the ability to repay the loan within the terms provided. Credit qualification requirements will vary from one lender to another, but there are certain criteria that are common with each one. For the most part, every established business that has a good credit history has a better chance of obtaining commercial equipment financing than other businesses. The best terms are usually available to those businesses that have been operating a minimum of 2 or 3 years.

The first thing we need to understand is the importance of choosing the right lender for our financing needs. We want to make sure that our business is well represented on our loan application as well. The first step is to draft a letter that establishes our reasons for borrowing the money. Once the letter is drafted, write our business plan as every lender requires this. This will tell the lender how the loan will improve our business and reflect our goals. Be sure to include any future expansion and growth projects, financial plans, and projected revenues.

Once we have done this, start gathering the financial documents we will most likely need such as our accounts payable journal, business and personal tax returns, balance sheets, profit and loss statements, etc. If we are applying for secured commercial equipment financing then we will need to provide collateral. This usually includes available surplus cash, property equity, or savings which could be used to secure the loan. Be sure that we compare several lenders as to their requirements.

We should contact certain agencies in our area that help businesses secure the funds they need for their companies such as the SBA (Small Business Administration), SCORE (Service Corps of Retired Executives), and the Small Business Development Center. All of these agencies can assist we with application process as well. The important thing is that we investigate all the options that we have at our disposal when searching for commercial equipment financing.

Buying vs. Leasing
Another option for obtaining the equipment we need for our business is leasing. Every business is different and the decision to lease our equipment or purchase it has to be made based on individual business circumstances. Although leasing gives we more flexibility and enables we to preserve our capital, it could wind up costing we considerably more in the long run.

Here are the advantages that leasing provides:

lower upfront expenses more flexible terms tax deductible as a business expense upgrading equipment is easier Naturally there are some disadvantages to be aware of where leasing is concerned including the following:

higher overall costs obligated to pay for the entire terms of the leas ewe don’t own the equipment, we are only paying for the use of it-although we have higher up-front costs when financing our equipment, we own it unlike with a lease. Plus we may be able to deduct the depreciation on our equipment and there are certain tax incentives that we may qualify for. If we are trying to decide between financing our commercial equipment and leasing it, we need to consider the advantages and disadvantages involved. But ultimately, the decision rests on our shoulders.

About Fast Business Loans and Commercial Loans
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