When your business is seeking heavy equipment financing, there are several things that you will want to keep in mind to ensure that you are making the best choice for your company. What follows is a brief checklist that will help you get all of your questions answered throughout the financing process.
Decide what vehicle or vehicles you need for your business. There is an untold variety of heavy equipment available in the market from trucks to trailers, used for everything from towing to hauling to refrigerating, and you need to prioritize to get the equipment that your company needs most immediately. Although you may ideally want to add many more vehicles to your fleet, it will depend on your current financial situation as to just how much heavy equipment you will qualify for financing for.
Research the heavy equipment market to learn about all of the options for the particular heavy equipment that you need. There are vast differences in the capabilities and cost of various heavy equipment that depend on how much of the latest technologies and advances are being utilized for that equipment. Although it is nice to have the most comfortable and efficient equipment, rest assured that there are lots of reasonable solutions for the needs of all business financing ranges. Especially in the current transportation industry, there are options to lease or purchase both new and used heavy equipment. If you have decided to opt for a used piece of heavy equipment, be sure to have it inspected by a reputable mechanic who has experience working with that sort of equipment. This will allow you to determine if the equipment is in need of major or costly repairs, maintenance, etc. or if it has had a history of repairs or damage. If this is the case you may be able to negotiate a lower sales price.
One of the most important factors to consider beyond choosing the type of heavy equipment to finance, is to determine the type of financing that will benefit your business most. There are financing loans as well as leases, and each has their own pros and cons. With financing, your business will ultimately own the equipment, along with any cost savings that go along with having the vehicle paid off, as well as initial tax write offs and deductions. There are no mileage or wear and tear limitations with financing. Leasing has the benefit of allowing you to trade up every couple of years which is great for businesses that want to operate the latest in heavy equipment technologies. Leasing also allows you to avoid much of the depreciation of value and costly maintenance that occurs over the lifespan of the equipment. There are tax deductions available as well for companies that decide to lease. You will want to contact your financial advisor to calculate the costs and benefits of each option to determine which will be the most strategic for your business.
When contacting heavy equipment financing companies, you will want to learn as much as possible to compare more than one financing firm. Some of the factors to keep in mind are the rates, incentives, fees, and terms of the financing options which are usually based on the health of your credit. In addition, you can review the website of the company to review the financing company’s performance and testimonials of customer service. Even better is to get a direct referral from a respected colleague or partner. Carefully review all financing and lease terms before signing anything and do not be afraid to ask questions. A reputable heavy equipment financing company will be happy to lead you through the application and approval process.
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