Many companies need heavy equipment to carry out the day-to-day operations of their business, and that means they’re always looking for a way to save on equipment purchases. One of the best ways to achieve this objective is to use asset-based equipment financing, and in this article we’ll discuss the advantages of using this approach.

How it works

The way asset-based equipment financing works is to allow entrepreneurs to leverage the value of their current assets by using them as collateral for obtaining a loan. This bypasses the need for qualifying for a traditional loan on the basis of credit history and good business history. Whatever assets are used as collateral, an alternative lender will assign a value to those assets and advance you a sum of money somewhat below that assessed value.

Assets which you can use for this purpose would include real estate, existing equipment, Accounts Receivable, and your total inventory. You can use one or more of these assets to serve as collateral in order to obtain the amount of money you’re seeking, and then you can use the money for whatever business purposes you need.

Obtaining asset-based equipment financing

The best way to obtain an asset-based equipment loan is to work with a financing company that is very familiar with the kind of equipment you intend to purchase. When you find the right financing company, you should make sure that any agreement set up with that company includes very clear terms and conditions, and that there are no surprise clauses which will cause the financing rate to be significantly increased. Once the lender has assigned a value to whatever assets you’re using as collateral, the documentation can be worked up fairly quickly, and you can receive a sum of upfront cash, for which you would make monthly payments until the loan has been paid off.

Looking for equipment financing? 

Many companies can take that next big step to success by obtaining a critical piece of business equipment, and if you need equipment financing to accomplish this for your business, we may be able to help. Contact us at Integrity Financial Capital to see if we have a financing solution which can help you achieve your business objectives.