What Equipment Financing Companies Want to Know
This has been a very difficult year in the world of business and unfortunately it has been a year which has meant that many businesses have been forced to close their doors. When this happens it makes it very difficult for the companies who were owed money by those businesses and whilst in some cases they will get the money back from tribunals, in the main the money is lost. For this reason why are seeing banks, lenders and equipment financing companies in particular, seek to ensure that any future investments which they make are as sound as they can possibly be.
The catch-22 for these businesses is that they are looking to invest as much as possible in order to keep things running, but they are not able to to do so without tight protocols and new rules. This is in fact a great time to be launching your business and using an equipment financing company is a great way for you to get off the ground and secure the money which you need in order to get going, but you will need to know your stuff before you ask for financing.
Spending The Money
Financing your business, or the equipment for your business in this case, is not as simple as asking for a set amount and then it being handed out, you will have to break down the spend. Financiers want to know exactly how you are going to spend their money, right down to the last penny. This type of lending is not prepared to give you $10,000 so that you can buy $8,000 of equipment and then spend $2,000 on marketing. You need to factor in every cent that you plan to spend and ensure that it is all spent on equipment for your business.
How it Will Help
Not only do companies wish to know what you are spending the money on but they also want to know how this is going to help the business. You should be able to describe how this equipment will help you to scale up the business, what it means for your ability to produce for your customers and how the business will benefit overall.
State Of The Business Now and In The Future
And of course any lender worth their salt is going to want to know what state your business is currently in, and what it is going to look like in the next 2, 5 and 10 years. Ultimately this is because they want to know how you care going to be able to repay them and whether or not you are in a situation now which is strong and stable. No lender wants to give money to companies which are already in debt or which have reneged on promises before, and you will have to know your numbers very well indeed to prove to them that you are a safe investment.
This is the very lest which you’ll need to know before asking for financing.