If you want to create a business or are running a business and require financial assistance surrounding equipment financing, there are multiple ways through which you can go on about completing this task.
You can leverage the power of bank financing and dealer financing, or alternatively, you can pick up equipment financing directly.
Equipment financing can, however, equip your business for success due to the fact that it will enable you to gain access to working capital directly. It pays you with cash for a piece of machinery that requires payment in full prior to the machinery becoming available for production and contributing towards the revenue generation process.
If you are aiming to finance your equipment with a loan, rent it with a lease, or create a custom plan, there are numerous ways through which this financing goal can be accomplished.
However, many people might go for financing through their banks by default due to the fact that they just have the general assumption that it is the best finance option or due to the fact that they have not done the research or lack the knowledge when it comes to the alternative options that are available.
Even at the very least, these business owners have utilized bank loans for a specific goal throughout their company’s history, so going out of their comfort zone might seem a bit intimidating at first.
However, for those who want to find the best financing deal possible and are looking for alternative ways through which they can gain the capital they need, there are options such as Coastal Kapital.
Today, we will be jumping into everything you need to know surrounding bank financing and equipment financing so that you can make a well-educated decision as to how you want to move forward with your financing goals.
Bank Financing Explained
Bank financing is essentially the process of gaining funds for your business activities, making purchases, or investing directly from the bank. What this means is that the bank is providing the capital to you, and as a result, each business owner can get the gear they require/ However, larger loans will typically have specific terms and conditions or covenants that business owners have to adhere to.
First, we will be going over bank financing and what each business owner can expect when they take out a loan and get their equipment this way.
For one, bank financing results in lien assets. There’s also APR and compounding interest, and the balance sheet results in long debt.
Furthermore, there are reports of personal credit, which can affect personal financing, and this does not lead to the establishment of business credits.
This procedure also liens the whole business in a blanket lien and has a cap, or in other words, the amount can only lend a predetermined, specific amount of capital.
Additionally, it also reviews the full tax returns and debts and takes numerous months to process.
Direct Equipment Financing Explained
Direct equipment financing, however, has numerous advantages when compared to bank financing. There are competitive rates, flexible payback terms, and a direct relationship with the advisor. UCC is only required on the asset that is financed, and the fixed rate is simple to manage and understand. There’s also access to off-balance sheets, and this does not report to personal credit.
Furthermore, by taking this route, business owners can build business financing credit lines and can be self-insured, where the piece of equipment can be insured instead of the commercial policy.
Additionally, this type of financing and route has no cap, and the intermediary that provides you with the capital can give you as much as you need as long as you are qualified to receive it. There’s also a solid opportunity cost based on the revenue, and the approval takes place the same day. This type of financial support is also tax deductible through a simple interest contract, and there is the option for deferred payments. It can also roll out within different instances.
Dealer Financing Explained
When it comes to dealer financing, the retailer helps businesses secure a business loan through partner financial institutions.
There is a built-in rate, which is bind discounted, as nothing is 0%. Businesses can buy all of the parts through them, including insurance, labor, and warranty.
Equipment upgrades are not a possibility through this method, as businesses need to pay off full notes first. This, as a funding process, takes a long time to complete, the customer service can be poor, and businesses cannot buy old used equipment for trade alongside other flexible variations. Furthermore, business owners cannot buy from multiple dealers.
How Coastal Kapital Differs and How It Can Help
Coastal Kapital LLC is a financial service leader when it comes to commercial equipment or asset-based lending.
The company was founded in 2007, and since then, its main mission, as well as a goal, has been to provide easy, safe as well as quick services, and it has maintained relationships with business owners, vendors, and manufacturers.
Coastal Kapital stands out when it comes to equipment financing due to the fact that there are numerous different options that fit any business’s needs, and the approval process is easy and quick. Start by filling out the application form.
Furthermore, Coastal Kapital also operates with over 500 dealers globally. All business owners need to do is apply online and get their approval within a span of minutes. Then, they can speak with one of the loan specialists and get a detailed quote.
All that’s left for them to do afterward is to sign documents electronically, after which they can get their funding.
The main options include EFA, or equipment finance agreement, 10% put option buy, FMV lease, or fair market value lease, where the average terms are 24-60 months, and the amount can range from $5,000 to $500,000.
Coastal Kapital aims to simplify the overall procedure with one-page applications and without hard pulls on your credit. Now is a better time than any to get the equipment financing your business needs in order to create a better future and progress, where you will begin to generate revenue as quickly as possible.
Make sure that you take the time to contact one of our financing experts today, so you can get a quote and begin your financing journey.