Having the opportunity to grow your business can be especially exciting — but it can also be an expensive time. Scaling typically requires immediate cash to cover those burgeoning operational needs, such as the purchase of new equipment.
That’s where an equipment financing loan can make sense. Equipment financing covers the cost to procure essential items like heavy-duty machines or restaurant-grade cooking ovens. Because you’re using a loan to finance an asset, you can expect terms from 12 to 72 months, depending upon the lender and purchase size.
After getting a small business loan earmarked for equipment financing, you’ll be able to make your purchases. But you won’t necessarily see the money. Instead, the equipment financing dollars you receive will be sent directly to the equipment dealer.
As you can imagine, this type of transaction arrangement can streamline big equipment purchases, especially if your company has struggled with credit history in the past. But what if you need additional resources to support that equipment?
Growth can certainly be expensive, and that’s why PEAC Solutions offers working capital loans in addition to equipment financing. Working capital loans for small businesses are short-term loans that provide companies with a lump sum of cash to support expansion projects.
Why Apply for a Working Capital Loan and Equipment Financing Simultaneously?
The value of business working capital loans is that you can get money within as little as 48 hours, and the payback terms can be as brief as half a year. You’re not limited to using the cash for equipment. You can use working capital loans to amass inventory, implement new technology, or initiate construction. In other words, fast working capital loans can be the perfect complementary partner to equipment financing.
When you have access to money to both pay an equipment vendor and cover growth expenses — like hiring additional staff to run the equipment or rigging electric systems for the equipment — you can scale without worry. Plus, you won’t have to compromise your savings. Rather, you’ll be able to budget accordingly to pay off both types of business loans and keep humming along.
That’s what happened for PEAC Solutions client, Staley & Sons Powerwashing. Scott Staley had successfully grown his Ohio-based business for 20 years. But to expand and reach to commercial customers and better serve residential customers, Scott knew they’d need more modern work vans and upgraded equipment.
Staley & Sons applied to PEAC Solutions for equipment financing to buy vans equipped with advanced steam pressure washers. After receiving approval, they also asked for — and received — a working capital loan to pay for wraps to cover the van in Staley & Sons branding. By leveraging both types of financing, the company was able to rapidly handle more clients and project a more professional experience — all while still feeling financially protected and secure.
Is it time for your organization to make the leap to a larger market? Do you need equipment to achieve your goals? Below are several reasons you might want to turn to both equipment financing and fast working capital loans.
1. You can use working capital loans for small businesses to offset non-equipment costs.
Let’s say you’re going to buy equipment. Your equipment financing will cover the purchase itself but not the collateral items you require to get the most out of your equipment. That’s where a working capital loan can be a financing bridge. You won’t have to tap deeply into the cash in your bank account. Yet you’ll still be able to expand as desired.
2. You can comfortably begin taking on more business.
Is your equipment being installed relatively soon? Do you already have major contracts in the pipeline? Make sure you can pay for extra inventory to fulfill your orders on time and to your clients’ expectations. With working capital loans, you can buy raw materials for your equipment. Additionally, you can use the funds to help educate your workers on how to use the equipment properly.
3. You can renovate your facilities to make room for equipment.
Even if you can squeeze your new equipment into your existing space, you might want to think about changing the layout of your current operational footprint. You can pay to upgrade the storage area for your equipment with short-term working capital loans. Be sure to add this information to your business plans when you’re applying for equipment financing. Lenders will appreciate being able to see how you intend to take care of your equipment and leverage it to the fullest capacity.
Are you eager to apply for a small business loan for equipment financing, capital working loans, or both? Contact a PEAC Solutions Funding Advisor now to talk about the best financial tools to make your expansion goals a reality.