Best Lenders for Equipment Line of Credit in 2022 – Nav
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An equipment line of credit is a small business loan that allows you to only pay interest on what you use. It also allows you to re-use the credit after you’ve paid it off. Instead of getting a lump sum, you have a pre-approved spending limit that can be used whenever you need it, much like a credit card.
Using a line of credit to finance your equipment can be a great option compared to a traditional small business loan for a number of reasons:
There are a few pros and cons of using financing for buying or leasing your business equipment.
There is an alternative to purchasing equipment outright either with your own money or through financing: Leasing.
With equipment leasing, you rent the equipment from a provider or manufacturer for a contracted period of time. At the end of the lease, you either own the equipment or return it. Similar to equipment financing, leasing lets you spread out the cost of the equipment over a longer period of time rather than paying in a lump sum at the beginning.
Other advantages of leasing equipment include:
To choose between equipment financing and lending, consider the type of equipment you’re trying to get and your business needs. If you’re starting a new business and want to get new equipment, leasing might be a better option than financing because you’re more likely to qualify with little to no business history, especially if you don’t have good business credit or a good personal credit score.
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Finding funding doesn’t have to feel like an uphill climb. Use Nav to instantly compare your best options based on your unique business data. Create an account to find opportunities you’re most likely to qualify for fast.
The types of loans available to you will depend on a number of factors. As with any type of financing, you’re going to need to meet a handful of requirements in order to qualify for equipment financing:
Equipment loan interest rates and terms vary depending on which lender you opt for, as well as your credit score, years in business, and other factors.
With good credit, you may be able to qualify for a loan at 5% interest with a 10-year repayment term. With a lower minimum credit score, a short-term loan may be more likely. Interest rates can go as high as 30%, which may not be worth it, depending on the piece of equipment you’re financing.
There are a number of ways to finance your business equipment, depending on your business needs:
You can find equipment financing in any industry that uses equipment, such as:
This list of equipment financing options is a good place to start to find an equipment line of credit or other equipment financing. A few line of credit options you may consider include:
To find the best equipment financing, it’s a good idea to know your business and personal credit scores, as well as what you’re likely to qualify for. Nav can help you find your best options based on your business data. Sign up for a free Nav account to see your equipment financing options and other small business loans today.
This article was originally written on June 30, 2022.
This article currently has 1 rating with an average of 5 stars.
As a digital marketing writer for Nav, Kat Cox works to provide answers to the questions small business owners have about how to set up, run, or fund their businesses. When she’s not writing blogs, articles, short fiction, or (kind of bad) French poetry, Kat can be found lacing up her tennis shoes for a run or walk with her pup or scouting for the best karaoke spot in Austin, Texas.
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