Machinery and Equipment Loans
Part of having a business is addressing the needs of changing or acquiring new equipment to stay updated and competitive in the industry, but to make this possible, most companies have to rely on machinery and equipment loans.
Going for replacements and new purchases is quite expensive, especially for small businesses that are either starting or haven’t been able to have enough income to finally invest in new elements. The common thought would be to maintain the current equipment and machinery as long as possible to avoid extra expenses and use the money in other areas.
But if you are a business that cannot afford to fall behind in upgrades and needs specific machinery to operate, you better not delay the expense. Several loans are available to cover specific needs from businesses that are looking to invest in these elements instead of having to leave part of their money and capital aside for it alone.
Now, here’s the common question: what loan should you apply for? Regular loans that you would actually request for a new property or refinance are not a fit since the terms are based on not only very large amounts but also, on either owner-occupants or real estate investors. Instead, you better go for machinery and equipment loans that are better options to finance the purchase or replacement of new items that are usually required for your tasks and activities.
This is the main aspect of this credit: lenders are open to approving the loan not only because you can repay it but rather because you actually need it. Unlike properties and premises, the equipment you will acquire with the money should be something you truly need and ensure you will actually use the funds for it.
Most banks, insurances, and similar lender institutions don’t approve machinery and equipment loans that will be destined to purchase unnecessary items according to the operations and needs of your company.
However, there’s a thin line between what you need and what you want to add to your business to make it more efficient and productive, and usually, the last option can be missed due to the conditions from the previous lenders. This is why this type of credit is better to get it from private companies and investors where you get most of the money required—if not all—, and you usually can use it to acquire any type of machinery and equipment.
The team at Commercial Real Estate Loan Pros of West Palm Beach can offer you reasonable and accessible conditions for your loan for you to finally own the equipment required. Unlike banks and other lenders, we will focus on the needs of your business and its equipment, draw a financing plan around it, and provide the funds that meet the expenses. We won’t limit you to the equipment or machinery you need or want to acquire since we only want proofs that you are investing the funds in the right goal.
How do machinery and equipment loans work?
The concept is just as basic as a regular loan for a property or real estate investment. However, since acquiring the items requires less money—most of the time—, the repayment time, interest rates, amortization, and terms are completely different and fixed according to your needs. Overall, any bank and the institutional lender should be able to provide you with this credit, but it is difficult to work out conditions that can meet your monthly budget and the needs of your business.
Most of these lenders have over 3% of interest rates, which can sound a bit lower than expected but for this type of credit, it is actually high. This is why private lenders like us have been crucial for any company and business with machinery and equipment needs over the last 20 years. They are able to access more funds and resources without paying high-interest rates, and the requirements or conditions to fulfill aren’t as demanding as other institutions.
Now, when you apply for a machinery and equipment loan with us in particular, how it works will be even more similar to regular loans. You reach out to us and provide the basic documentation and information for your application:
- Credit score.
- Annual revenue.
- Purpose of the credit.
- Years active or in businesses.
Once we review this, we will determine if you can apply for the loan based on your annual revenue more than anything else and our team will get back to you in a matter of days. If approved, the system will work with a fixed interest rate lower than 3%, you will have up to 5 years for repayment—can be more or less—, and we will let you apply to a minimum or maximum loan size.
Of course, since you might have in mind the amount you need, we will start from there but also give you more options in case they’re needed. The payments will be monthly and our team can estimate the specific amount based on your revenue and considering the interest rate. It isn’t complicated to access one and work around it for your equipment and machinery. Just a matter of purpose and how you will use the credit.
Full loan vs line of credit
The term ‘machinery and equipment loan’ englobes everything that involves credit for your new acquisitions and replacements. However, you can go for two main options when applying for one: a full loan or a line of credit. While a full loan works just like the one described before, the line of credit consists more of a system similar to a credit card.
You can apply for this type and you’ll have a specific amount of money to use and pay immediately or over time. However, you will be able to access it for the time you request the line of credit or we decided to approve it for you. The huge benefit is that you can get the funds anytime and whenever you need them without reapplying for more credit and waiting for days to access them.
You will have the amount available every time and once you’ve paid it back, you are able to access it again or the money you have left from the total credit. At Commercial Real Estate Loan Pros of West Palm Beach, we offer both options and will help you to determine which one of them you need the most.
If you are a new business or one that is going through upgrades, you’re most likely to need a line of credit. But if you are aiming for a one-time purchase and specific equipment, a full loan and regular one will be the most fitting one.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: