What You Should Know Before Financing Business Equipment

If you have a business and want to expand, the biggest problem you will face is financing that expansion. It is frustrating for many small businesses that even though they may be making a profit and good sales they are still frequently not able to afford to invest in new equipment for their business. One solution is to look at equipment finance.

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 Choices for Financing New Equipment

In all industries there are different levels of quality. This applies just as much to the different pieces of equipment that might be needed in your business. You can buy from suppliers of cheap machinery and equipment or you can go to the top-end distributors for your try.

To take a simple example, if you have a beauty salon, then the equipment that is used in it will be seen or applied to the clients depending upon the services rendered to each customer. Bear in mind this is a beauty industry involved hair cutting, styling, outfitting, nail-care, and spas among other services. As such, the equipment needed might range from the standard levels of quality to extravagant types. The grade you go for will depend to a large extent o the discernment of your target market and your location. It will also depend on the maturity of your business. For example, the cheaper standard salon equipment might be the way to go for most salons that are starting up. Those that have a good name and reputation in the industry may opt to buy the more expensive equipment if that suits your business.

Do Not Overlook Discounts

It only takes a bit of research to come across equipment on sale at discounted prices. The deal might sound good, but it is wise to looking into the reputation of the supplier and the reasons why they are offering the discounted equipment. Are they using it to get your attention or are they selling off end-of-the-line equipment? This is not to say all supplier offer false discounts. Some can make bulk purchases of the equipment for the manufactures or get used equipment at a good price. Reputable supplies will sell good quality equipment are discounted prices. Just do some background check on the supplier, their reputation will surely help support the discounted sales offer.

New or Used – Both Have Benefits

In some parts of your business you will want to show customers the best equipment you have. Again using the salon to illustrate, you might want a new spa. In this instance getting a brand new one might make sense. However, if you need some new equipment to hygienically clean the hair and nail cutting tools, this is not going to be seen by your clients. In that case you might be advised to look for a serviceable second hand piece of equipment.

Look for Equipment Finance or Leasing Deal

Even with steep discounts, equipment can be a big financial stretch for some businesses. A way around this and to avoid a big call on your cash reserves is to look into the possibility of a leasing deal or an equipment financing arrangement. You should nevertheless do this with caution.

A number of suppliers do offer such options to their customers, but to only those they deem able and worthy of such extensions. The payments are in small monthly installments that will do not place a financial burden on the infant business as it grows. Just look at all financial options include the flow of cash in and out of the business before settling for an equipment financing option or leasing deal.

Alternatives to supplier equipment finance in NZ

While suppliers are often willing to provide various credit terms for equipment, they may not necessarily y be the best for your business. You should consult your firm of accountants to get their input on how you can finance new equipment for you company.

You can also talk to private commercial finance houses. They have various ways available for financing the purchase of machinery. One of the more common is called asset or equipment finance. In short, they provide the finance to the supplier and will take a security over the asset concerned. This does not place such a big strain on your business or you personally in terms of risk. It also enables you to get that new plant at favourable terms so you can expand your business.

For more information about equipment finance, visit this website.

NZ equipment finance