Equipment financing brokers, also known as truck leasing companies, are responsible for helping trucking companies acquire truck loans on their vehicles. An equipment-financing broker negotiates with banks and other lending agencies on behalf of clients in exchange for a fee or commission. For example, an equipment financing company can help clients acquire truck loans on new trucks at reduced interest rates; once lenders accept loan applications, they get paid their fee by making it seem like they were extending money to new customers (so they won’t lose face). Equipment financing brokers may also assist trucking companies with insurance. These professionals will purchase policies through insurance companies on behalf of their clients and then bill them directly to protect against loss in case a policyholder does not have coverage.
Equipment financing makes it possible for large or small companies to purchase equipment that they would not be able to otherwise due to lack of capital. The money for these loans comes from a number of sources, including private investors as well as banks and other financial institutions. If you need money for your business now, talk with an equipment finance broker today about how an equipment loan can benefit your company now and in years to come.
Flexible Financial Solutions
Trucks have been an integral part of trade and commerce since their development. In today’s society, trucks are relied upon as a primary mode of transport, which means that a lack of a truck or a loan for one could be detrimental to businesses. Suppose you own a business or own a fleet of trucks. In that case, truck loans can benefit your business in many ways: cash flow improvement, cash flow flexibility, and diversification of funding sources, asset acquisition and more. The professional equipment finance brokers are here to help you take advantage of these benefits.
When you are considering financing your new truck, one of your most important objectives is to minimize risk. When you are looking at financing options, what are some things that you consider? For example, an equipment finance broker can help to determine whether leasing or owning is a better choice. Before getting into leasing and ownership specifics, though, let us look at how an equipment finance company operates and what they do for their customers. Typically, an equipment finance company will take a security interest in any vehicle financed by them. This means that if you do not pay your lease payments as scheduled, they have legal rights to repossess or foreclose on your vehicle if it has not been fully paid off yet.
Improved Expense Planning
Because you are purchasing a vehicle over a set term, your business will be able to forecast monthly expenses and plan accordingly. Because you are paying for a portion of that vehicle through depreciation, there is no need to layout an initial lump sum in order to get started. Leasing makes it easier for business owners with less-than-stellar credit scores or who don’t own valuable assets or collateral to qualify for loans. Using lease equipment can also help in situations where lines of credit are already maxed out.
Business Cycle Flexibility
Equipment loans, as a small business loan product, are highly flexible. These small business loans can be used to finance equipment purchases ranging from $2,500 to hundreds of thousands of dollars. Business cycles can easily be managed because payments and other contract terms may be set for as little as one month and up to 10 years or more (depending on total value financed). Because there is no long-term asset financing via equipment loans, this type usually involves less time and money spent on the application due to limited underwriting requirements. For example, 95%+ credit scores or strong personal guarantor required; financial statement preparation generally not required; collateral not typically needed; no fixed assets verification.
If you are a first-time buyer or have poor credit, it can be not easy to secure financing for a vehicle. When you work with an equipment finance broker, they can match you with lenders that are willing to take on high-risk loans. Equipment finance brokers often have lenders that will work with sub-prime customers or even those who have defaulted on previous loans. The brokers look at your business and its long-term potential when making their recommendations, which increases your chances of being approved for financing.