There are a number of different types of Equipment Loan available:
Do you run a seasonal business or a business where profitability is subject to market trends? A Step-Up Step-Down loan allows you to adjust payments so you pay more when business is good and less during slow times.
Quarterly Equipment Lease
If your business runs long term projects, or simply doesn't function on a financial month-to-month schedule, quarterly payments may be the answer.
Many leases have a payout at the end of their term, which you may not have the cash to cover. There are also situations where a slowdown in business or a freeing of capital for expansion or special projects may require a refinance. Alternatively, business may be booming and you might want to shorten an existing lease term to reduce losses to interest payments. Finally, an improvement in your credit rating might allow you to negotiate a better lease rate.
A sale leaseback agreement allows you to sell existing equipment you already own to a lender for a lump sum cash payment at current fair market value. You then lease back the equipment, keeping it for your operations while accessing funds for other needs.
Fair Market Value Lease
Does your business rely on equipment with rapidly updating technology, such as the latest generation of computers or robotic vehicles and equipment? A Fair Market Value lease allows you to defer some of the purchase price to the end of your lease term. You then have the option to purchase the equipment at current fair market value, continue lease payments or return the equipment to the lender and upgrade to new equipment.
Lease or Loan?
There's a common perception that loans are better than leases due to the terms but this is not always the case. There are times when a lease makes good financial sense as lease payments can be written off as an operating expense.