Why Equipment Financing is Crucial for Established Businesses

Every business, big or small, needs bankrolling to sustain its growth as it goes through several phases in a competitive market. Businesses that are managed well and have not gone through much financial turmoil cannot do without bankrolling. There are different ways to raise capital, and depending on a number of factors, businesses choose an option that is appropriate for them. 

Equipment financing has become a very important part of capital expenditure in almost every kind of business. It is not only businesses that operate in industries with obvious use cases for equipment and machinery that need this type of funding. Businesses like those in accounting or law also need equipment — e.g. computer systems, coffee-vending machines, etc. 

Here we will look into why equipment financing is crucial for small businesses in specific industries and how it helps them better compete in their respective markets.

Equipment financing for manufacturing

Manufacturing industries are varied and include the production of a seemingly endless list of goods or products. In contrast to what might initially be imagined, many manufacturing businesses are small in size. Regardless of size, however, all manufacturing businesses require maintenance and repairs on existing equipment. They also require a procurement of new equipment.

In food production, a small-scale dairy operation requires refrigerated container tanks, milk trucks, barn equipment and more. The kind of equipment that is needed is expensive and a business owner might not be able to make the necessary purchases with the business’s available cash balance.

If any of the equipment becomes non-functional and requires replacement, it might be extremely difficult for the owner to proceed with the necessary purchases without funding from an outside party. For a small dairy operation, alternative business funding solutions are best because of hassle-free loan approvals and a fast disbursal of funds.

Equipment and the construction industry 

Major construction projects are typically awarded to big, well-established construction companies. Those companies further distribute the work to contractor firms which may then award subcontracts to smaller contractor firms for a ground-level execution of the work.

A lot of heavy duty equipment and machinery is used in construction. This includes concrete mixers, giant cranes, bulldozers, front loaders, backhoe loaders, and more. Each piece of equipment plays a critical role in the completion of a construction project.

If any piece of equipment breaks down or becomes non-functional, it could affect the timely completion of the project that it is involved in. If a project is delayed, it could have monetary ramifications. A quick replacement of the equipment is therefore necessary and equipment financing makes it possible.

Transport operators and vehicle replacements

Transport businesses operate large, heavy-duty trucks that can carry 40-foot containers and over dimensional (OD) cargo. It is necessary for cargo to be delivered in a timely manner, and delays in delivery can lead to delays in payment. This can trigger a cash flow crisis that eventually becomes too large for a business to manage.

If a vehicle in the fleet breaks down and is in need of expensive repairs or needs to be replaced altogether, the only viable option might be to receive equipment financing from an alternative funding provider. Big banks and traditional lending agencies might refuse to fund a small business in this situation.

The best option for a transport company is to get the business capital loan from an alternative funding agency, and the reason is simple – hassle-free approvals and much better interest rates than what traditional lenders typically offer.

Supply chain operators need storage equipment 

Supply chain management is part transportation and part warehousing and storage. In an area where massive quantities of cargo are stored for loading, pieces of equipment like forklifts, reach stackers, and cranes are indispensable. Without the right type of equipment, a proper movement of cargo is impossible. 

Hauling equipment can break down easily with time and major expenses can follow. If the business operating the equipment decides that new equipment is in order,  the type of easy, hassle-free equipment financing that is offered by alternative funding agencies is its best option.

Small businesses often function as outsourced ancillaries of big businesses. And if they are expected to operate optimally, it is essential for them to have a ready and reliable source of capital to meet their urgent equipment-related needs. Only then can they expect to operate smoothly and not experience any setbacks in their workflow and, by extension, their financial health.

Running a business — big or small — is a difficult endeavor. This is especially true of a small business that is just finding its foothold in the market. More established businesses find their own obstacles to overcome, and more often than not, they are obstacles that are related to a lack of sufficient capital.

The fuel that drives a business is capital or, in other terms, money and its equivalence in value: debt and equity. The equity of a business is the sum total of its assets minus its liabilities. Debt is money that is borrowed, and in short, money is what fuels a business. A surplus of it helps a company thrive and a lack of it is fraught with problems.

In this article we will discuss the importance of capital for business equipment and the best way to obtain it. Whether it is for repairs or the acquisition of new equipment, US Business funding for business equipment is an essential part of keeping a business running and profitable.

Use of equipment in businesses

Almost every type of business today requires a use of equipment of one sort or another. If someone is running a retail store,  for instance, they need a surveillance system, computer systems with scanning devices at the cash counter, and mechanical cleaning equipment.

If they are running a manufacturing company, then their need for equipment will be much different and the associated costs will presumably be much higher. A need for repairs might present itself more frequently, and maintenance will be a regular affair. Funds will have to be available at a moment’s notice if their business is to survive.

Generally, investment in equipment is found to be of most importance in manufacturing, mining, transportation, supply chain and construction businesses. The operations are carried out by small and medium sized businesses that either operate independently or act as outsourcing partners for bigger businesses. 

There is a good scope of growth in these kinds of operations, but they are also very competitive. Productivity must not be hampered by equipment breakdown or unavailability. Fast, easy, and hassle-free financing solutions are therefore critical.

Understanding the basics of EQUIPMENT FINANCING

When a loan is obtained in order to purchase new equipment or conduct expensive repairs on existing equipment, the lender covers the risk involved by obtaining a lien on the equipment. In essence, the equipment itself becomes collateral for the debt.

Most lending agencies will not provide 100% financing for the equipment someone wants to purchase. At most, it can be expected that 80-85% of the value of the equipment will be financed by the lender, and the borrower will be required to cover the balance.

The loan will not be approved until the borrower has made a commitment to pay the balance. This is because the lender wants to have control over the equipment until the loan has been repaid with interest. Control over the equipment is exercised through a lien, which works as collateral against the debt. It should be emphasized Equipment Financing is not the same as an unsecured loan for meeting short term cash flow problems. The equipment being financed is taken as collateral as already mentioned.

Qualifying for equipment financing loan

In order to qualify for equipment financing, a running business must demonstrate a proven use of the equipment it needs to purchase. Different lenders have different approval processes in place for their own respective business financing services. Traditional lenders like big banks and financial institutions have very strict norms of approval while smaller alternative funding agencies are more flexible.

For small businesses, it is typically difficult to meet many of the qualifying requirements set forth by traditional funding companies. These lenders begin by verifying the personal credit history of the borrower. And on most occasions, they have a revenue threshold that precludes smaller businesses from obtaining the funds that they need.

With the qualifying terms and conditions aside, it should be emphasized that the general approach of big lenders simply does not favor small businesses. Even if a small business meets the qualifying criteria, the loan that it receives is expensive in comparison to what a big borrower has to pay. The interest rates are unfavorable, to say the least.

Business Loans for Lawyers and Law Firms

The media has always depicted law firms as glitzy dreamlands and lawyers as rolling in cash. Reality is quite far from that. Law firms operate by setting up balance sheet accounts to collect advanced client costs from their clients. However, these accounts may be settled a long time after the costs are accumulated. It can take months or even years to clear the entire sum.

But when it comes to soft costs, lawyers and law firms have it bad. They may face pushback or even outright protests from clients when it comes to these expenses. However, these costs do amount to substantial amounts over the years and unless the money is gradually accrued, it can take a toll on their business.

A positive bankroll, but more importantly, healthy finances, are essential for a law firm to keep operating smoothly. There are multiple expenses, like rent for office space, wages of lawyers, paralegals, and other staff, furniture and stationery costs, monthly bills, court expenses, and even a lot of overhead costs.

Plus, contingency funds for unforeseen events must also be set aside. A lot of law firms often also pay off law student debts of their recruits, albeit as loans. But unless that employee receives their wages, they cannot pay it off either.

Hence, it is not unnatural for law firms, especially smaller ones, to often run into financial problems. Even when their budgeting is solid, cash crunches can appear. If the finances of a law firm are not restored when the deficit is still low, it can even run into bankruptcy. A little help can go a long way for them and help them regain their financial footing.

That is why we at Alternative Funding provides Business Loans for Lawyers and Law Firms to cover their expenses while they are still waiting for their fees to be paid. After all, the expenditures will not wait for the client to pay. We have a range of business financing solutions for you to choose from, according to your needs. Contact us today for your FREE business funding consultation!

Financing Options For Doctors, Medical & Healthcare Practices

From an outsider’s perspective, doctors are never short on cash. The medical profession is known for its financial rewards, and it’s not as if people are going to suddenly stop getting sick one day. Yes, most doctors are compensated very well for their services. Their payment structure, however, isn’t as rewarding.

Doctors typically rely on insurance reimbursements, patient deductibles and co-pays for the majority of their income. Between all three sources of cash, the full payment is usually not received until at least one month after an appointment. A doctor’s income is usually completely unpredictable.

This is money that should go towards paying monthly bills, unforeseen expenses, or growth-related investments. Being unable to cover regular expenses on time is particularly dangerous for doctors because when it’s busy, they go through inventory very quickly and are always in need of replenishment. As any business owner will tell you, the longer you wait to cover one expense, the more likely another expense is to arise and the less business you’ll be able to do in the meantime.

Relationships between doctors, patients and insurance providers have also only become more complicated as of late. Compensation for certain procedures might seem fairly clear-cut until weeks later, when the doctor finds out the patient and insurer owe different amounts than previously thought. After looking over his or her finances, a doctor could easily discover a $100,000 hole due to unresolved insurance claims and late-paying patients. Doctors can technically get a better sense of timing by constantly chasing down insurers for collections but they are busy enough already.

Alternative Funding provides Small Business Loans for Doctors, Healthcare Professionals & Medical Practices who are waiting on insurance payments and other receivables. These funds can be used for equipment, supplies, furniture, payroll, expansion, remodeling, or any other medical office needs that require cash in hand. Our financing is perfect for practices that find themselves cash poor and struggling to come up with money for immediate expenses. Contact us today for your FREE business funding consultation!

Funding Options For Construction & Contractors

All businesses must spend money in order to make money. Some, however, must spend a lot of money just to stay vital, and as luck would have it, these are the same businesses that do not get paid immediately after their work is done. Construction contractors often have to wait up to 120 days to be paid in full. Milestone payments are catalysts for a laundry list of financial dilemmas, and various external factors can extend this waiting period even further.

Bids can take weeks to approve, and then contract details must be ironed out. How are contractors supposed to pay their workers, fix their equipment, or finance their next project when their funds are tied up in receivables? Construction projects are time sensitive, with no room for negotiation. If the contractor cannot come up with the money for the upcoming project in time, the client will simply find someone else who can have it completed by the desired date.

New investors and unexpectedly inclement weather can cause more delays, as if the winter months weren’t painful enough for the contractors. Industry outsiders have probably never thought about how construction companies sustain themselves when their work spaces are covered in snow.

The extended business cycles of construction contractors ultimately prevent them from taking on more work, paying their suppliers on time, and making sound financial decisions. Instead of preparing for projects well ahead of time, the search for workers and equipment begins right after the project is accepted. They don’t have the time or money to weigh out options for equipment or consider maintenance costs.

Alternative Funding is the ideal place to get Business Loans for Construction & Contractors. We work with commercial plumbing, roofing firms, electrical contractors, masonry contractors, cement suppliers, window fabricators, fence contractors, and landscapers to name a few. Contact us today for your FREE Business Funding Consultation!

Business Funding Options For Hotels, Motels & Lodging

Most hotels are seasonal businesses. They are located in areas that attract huge crowds but only during certain times of the year. The slow seasons can quickly go from inconvenient to downright treacherous, even for extremely successful hotels. Many are forced to lay off employees, fall behind on vendor payments or postpone vital upgrades. Yes, hoteliers are well-aware of seasonality but it’s not always easy to anticipate exactly when revenue will drop or ascertain whether or not they have enough cash to power through a few rough months.

And it’s not like the weather for any season is getting easier to predict. Typical conditions, like a snowy winter, a chilly fall or a clear, hot summer aren’t so typical anymore. In terms of demand, hotels just don’t know what to expect at any given time. These constant ups-and-downs make it very difficult to meet the increasing standards of vacationing clientele.

In order to stay competitive, hotels must have up-to-date TVs, pristine swimming pools, and fresh-looking furniture. People who are planning vacations also make reservations well in advance. With such little cash available during slow periods, hotels risk sending previous guests elsewhere by not marketing to them.

Alternative Funding has many years of experience providing Business Funding Loans for Hotels, Motels & Lodging. We can provide all types of business lending products. Contact us today for your FREE Business Funding Consultation!

Small Business Financing Options For Beauty Salons and Spas

You don’t have to be a business expert to envision the cash flow challenges of Beauty Salons & Spas. They are upscale by nature, and must therefore maintain a completely pristine appearance at all times. As if their standard equipment wasn’t expensive enough, any emergency repairs or replacements need to be taken care of immediately. You’ve probably noticed that beauty salons are not a rare find in most towns. But each one manages to stay in business, likely because they possess some sort of unique advantage.

This increasingly competitive environment has prompted many salons to offer more services and/or sell more products. The former strategy requires additional staff and equipment.

Focusing on the latter increases the likelihood of over-spending, leaving you with too much inventory or monthly loan payments you can’t afford. This means adding in new equipment such as massage tables, spa chairs, tanning booths, showers, and even hot tubs. And that doesn’t begin to cover the expensive skin care lotions and creams, or the maintenance of the equipment, towels and laundry, and scrupulous cleaning needed to keep the facilities looking pristine, beautiful, and welcoming. But building separate revenue streams is key for growth-related initiatives.

Along with the constant need to expand, what makes the finances of a beauty salon so difficult to manage is unpredictable demand. A glance inside a salon will usually reveal either a full house or a surprisingly empty day. A couple of slow weeks can prevent you from paying your bills on time and as a result, ruin your business credit.

Alternative Funding specializes in Small Business Loans for Beauty Salons & Spas. Contact us today for your FREE Business Funding Consultation!

Small Business Loan Options For Retail Stores

The retail industry is known for rocky cash flow, which is attributed to a multitude of uncontrollable factors. Most retail-oriented businesses are seasonal, performing the majority of their sales during certain times of the year. This results in dangerously slow periods but the success of the busy periods cannot be compromised. And like many other seasonal businesses, you can never be 100% sure as to how long or severe the slow season will be.

Seasonality also makes it very difficult to capitalize on sudden opportunities, like a new line of products or discounts on bulk inventory purchases. Inventory is a major issue for retailers in general, especially those that buy multiple seasons’ worth of products to compete against the selections of “big box” industry giants. It’s customers, however, who usually give retailers the most stress. Demand is notoriously fickle and nearly impossible to predict.

One of the few certainties for retailers is the need to adapt to today’s digital marketplace. A significant online presence, which might include an eCommerce function and aggressive marketing campaigns, is basically mandatory for developing loyal customers. Retailers that do not sell online must therefore invest in showing the value of an in-person experience.

Alternative Funding has many years of experience providing Small Business Loans for Retail Stores. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!

Small Business Loan Options For Landscaping & Lawn Care Companies

In order to generate consistent revenue, landscape companies tend to accept projects requiring massive capital outlays. They must quickly recruit workers, secure equipment, and create a plan that ensures the project will be finished by the required date. It’s not until this date that the company gets paid in full.

These expenses are often so high that they compromise the company’s ability to pay its workers in the meantime. And since landscape companies typically have such little time to prepare, it’s common for them to underestimate the true cost of a project and make incorrect spending decisions. They end up taking unnecessary losses by spending more money than they are eventually paid.

Preparing for projects would also be a lot easier were it for seasonality. Landscape companies experience a massive surge in demand during warmer months but struggle to pay their bills during the slow season.

It also doesn’t help that due to today’s increasingly unpredictable weather, the parameters of slow and busy periods aren’t exactly clear. Weather is one of countless external factors that could delay a project and put an even larger gap between compensation.

With such high costs associated with their usual operations, you can only imagine how difficult it is for landscape companies to expand. Standards are rising, so companies that lack an online presence and an up-to-date appearance will soon be wiped out.

Alternative Funding has many years of experience providing Loans for Landscaping Companies. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!

Owning a successful restaurant requires numerous costs. From inventory to staffing to rent and other bills, your business cannot survive without funds to afford these consistent expenses. That’s where a restaurant cash advance comes in handy. Most likely, your restaurant receives many payments through credit card transactions. By receiving restaurant merchant funding, your business will have a lump sum advance. Then, you’ll remit a percentage of your credit card transactions to satisfy your obligations. It’s that simple.

So, if you’re contemplating how restaurant business financing could improve your operations, you might benefit from a merchant cash advance. In this post, we’ll detail why restaurants prosper after receiving merchant funding, and provide guidance on how your business can attain one.

A Simple Application Process

If you’re applying for a merchant cash advance from a trusted alternative lender, there will be certain standards. For instance, they’ll want to see your most recent credit card statements. This is to ensure that your business receives enough credit card transactions to successfully utilize and remit this product.

Overall, the application process shouldn’t be too complex. If your business frequently receives credit card transactions, and you run your business in a responsible manner, you’ll likely be a viable candidate!

A High Approval Rate

If you’re concerned about whether you’ll receive restaurant business financing, don’t fret. Merchant cash advances have a high approval rate. While getting approved for some financing products rely heavily on your credit score, this typically isn’t the case for merchant funding. So, if you’re not confident that you’ll get approved for other financing options, you should consider restaurant cash advances.

Have Money to Grow Your Business

Once you receive a Restaurant and Bars cash advance, you’ll have money available to use for whatever your restaurant is currently lacking. Perhaps your restaurant’s interior could use some TLC, or you’re frequently understaffed. Getting a restaurant cash advance will enable you to proactively invest in areas of your business that need to be enhanced.

Have Money for Emergencies

Perhaps you don’t have any major ideas for improving your restaurant. Still, you can’t predict the future! What if your restaurant experiences an unforeseen emergency, such as having an oven break or running out of required inventory? If you have a merchant cash advance, you’ll have the peace of mind and will be able to navigate these unexpected twists and turns that come with running a small business.

Flexibility Based on Your Business’s Sales

With restaurant merchant funding, remittance is based on your business’s future credit card sales. Therefore, if your restaurant goes through a lull in sales, you won’t be expected to remit a set amount. Having a product that works with the pace of your business is a huge plus – and will save you unnecessary stress!

Having a merchant cash advance can allow your restaurant to thrive. You’ll have financing to put towards achieving your restaurant’s goals, and can remit your advance at the pace of your restaurant’s sales.

Hopefully after reading this post you understand the benefits of a restaurant cash advance, and can take the next step of applying for this product.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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