Growth should be a priority for any business, but with the world as competitive as ever, it’s becoming increasingly challenging for companies to remain relevant not only at a local but on a global scale as well. However, in any instance, business growth doesn’t come easy, and many businesses face barriers that prevent them from expanding their operations. In fact, a whopping 82% of companies fail because of cash flow problems. Additionally, with a lack of access to the right equipment, companies struggle to keep up with market demands and fail to offer quality offerings.
That’s where equipment financing can help. It’s an excellent way for a growing business to access the latest equipment without investing too much of their capital. This guide will highlight the different kinds of assets you can get through equipment financing, thereby showing how it’s suited to any business.
What Is Equipment Financing?
Before highlighting the assets you can access through equipment financing, it’s essential to understand what it is. Equipment financing works like a business loan to purchase the equipment you need for your business. The asset works as collateral, and, in many cases, a down payment isn’t even required.
One of the best parts about equipment financing is that any business in any industry can benefit from it. It gives companies access to the latest technology, has tax benefits, and allows them to invest capital into other areas that may demand more attention.
So, now that you know what equipment financing entails, here are five different businesses that can benefit from equipment financing.
The manufacturing industry continues to contribute to every economy significantly. As technological processes become more advanced, the manufacturing industry’s demands increase, and companies strive to adopt the most efficient methods to save time and money.
This industrial equipment doesn’t come cheap and requires a hefty investment. Additionally, a manufacturing company typically requires various kinds of machinery for every step of the manufacturing process, such as plastic molding, fabrication, and washing.
Equipment financing can help you buy this expensive equipment to continue to upgrade your manufacturing processes and potentially achieve economies of scale. With the latest technology, you can also introduce new products into the market that’ll allow you to attain market leadership.
Today, the retail market encompasses a wide range of businesses where customers purchase many goods and services, including food, apparel, motor vehicles, clothing, and other kinds of products. While eCommerce has provided tough competition to the retail industry, the in-store experience remains important as the retail sector is expected to grow to $26.7 trillion in 2022.
As the market landscape becomes more competitive, retail businesses need to improve customer experience. Faster payment processing systems can result in quicker checkouts, allowing customers to have a smoother and less worrisome experience. With equipment financing, your business can get new mobile payment readers, barcode label machines, new cash registers, and contactless payment terminals, all of which contribute to secure and faster payment processing that can help your business in the long-run.
The restaurant industry is massive; the United States alone has over a million restaurant locations, which is a number that is only expected to grow. For a restaurant to run its operations successfully and efficiently, it needs specific equipment. This equipment often includes commercial ovens, electric and gas grills, food processors, freezers, deep fryers, mixers, and refrigerators.
Equipment financing can help you set up your restaurant and run it by allowing you access to the tools and equipment required for a trendy restaurant. With adequate equipment, you can cater to a large pool of customers and even open a new location, all without burning a hole in your business’s finances.
Realistically, any kind of corporation that operates in a single location or multiple locations can benefit from equipment financing. This is because equipment financing isn’t just limited to hard assets; it also covers essential software that a business may require to retain its competitive advantage.
Today’s businesses have to be technologically sound and use software and tools that improve their organizations’ overall efficiency. Software solutions including cloud operating systems, accounting and bookkeeping software, payroll tools, inventory, and supply chain management software, and eCommerce software can help your business reduce workload by automating many tasks.
Equipment financing can help you get this software and the hardware required to run it. By providing a complete solution to your business’s needs, equipment financing can help any company simplify its operations.
A logistics company’s response for transporting goods from one location to another is heavily dependent on its vehicle fleet. For such businesses, equipment financing gives you the chance to lease vehicles at a cost-effective rate. This is especially true when you’re able to pay off the loan early during the vehicle’s lifespan, which typically lasts 10-20 years. With a larger fleet, your business can cater to more customers and expand its operations.
From providing vital production components to something as necessary as an office chair, equipment financing is an excellent option to explore for companies looking to grow. It doesn’t matter if your business doesn’t fall under one of the categories mentioned above; you should still consider equipment financing since you never know what financing options you may find that can benefit your company and help boost its operations.