Running a business is often a delicate balance of spending to support optimal performance and cutting back to maintain cash flow. When your business requires costly equipment to stay ahead of the competition, financing large purchases can be a challenge. Equipment financing is a broad term for a variety of financial solutions that can help your company get the equipment you need with options for managing your available capital and optimizing cash flow with easy, manageable, monthly payments. Four great strategies for equipment financing are equipment leasing, sale-leaseback, private sales financing, and auction financing. Which option has the right benefits for your business?
Equipment Financing Options
Equipment Leasing
Equipment leasing is a way to acquire the equipment you need without having to purchase it outright. You can begin using the equipment immediately with a financing plan of manageable monthly payments for a set term.
The Benefits Of Equipment Leasing
- Manage Your Cash Flow: Instead of a large cash output to secure the equipment your business needs, you can access the tools you need with smaller, more manageable and easy-to-budget-for monthly payments
- Keep Up-To-Date: An equipment leasing strategy allows you to update your equipment at the end of your lease term so you always have the newest, most advanced technologies available.
- No Maintenance Costs: Old equipment can be costly to maintain and repair. Because most leases are typically 5 years or less, you don’t have to worry about the expense of fixing clunky, outdated equipment or the productivity loss when equipment is out of commission.
Sale-Leaseback
If you have already purchased the expensive equipment that your company requires, you may find yourself strapped with limited available cash flow. This can impact your ability to pay staff, cover operational costs, and even take on new projects. A sale-leaseback strategy allows you to sell your equipment or machinery to a lessor, then lease it back with a manageable monthly payment.
The Benefits Of Sale-Leaseback
- 100% Cash Injection: You receive a cash payment for the fair market value of your equipment directly into your business. This immediately frees up significant working capital.
- Reduced Risk: Because ownership and the associated liabilities are passed on to the lessor, your organization can enjoy reduced risk.
- Manageable Cash Flow: You can simplify your budgeting with fixed-rate, monthly payments.
Private Sales Financing
This model of equipment financing is ideal when the equipment your business needs is not available through conventional procurement channels or when optimal pricing is available through a private seller. In the past, there were few options to finance equipment when not purchased through an authorized dealer or recognized vendor. Private sales financing is the solution.
The Benefits Of Private Sales Financing
- Get The Best Equipment At The Best Price: When the equipment you need is highly-specialized, customized, or simply just scarce your purchasing options are limited. Private sales financing facilitates a purchase from an overseas vendor, a non-conventional dealer, or even a private reseller when that is your only option for purchase or when that is the best deal to be found.
- Stay Ahead Of Your Competition: When you are struggling to find the equipment you need at an affordable price because it is back-ordered, delayed due to supply chain challenges, or in high demand, it is likely your competitors are experiencing the same. When you source out the right equipment, you need to move fast. A private sales financing partner can help you stay one step ahead of the competition.
Auction Financing
Purchasing equipment at auction can be a smart way to get what your business needs at a very favourable price. Businesses can acquire anything, quality equipment from small tools and office technologies to large, heavy-duty agricultural machinery and even manufacturing equipment. But purchases made at auction are cash only. An auction financing partner can help you secure the cash you need to make large-scale or lot purchases with a strategy to pay back the financing with manageable, monthly payments.
The Benefits Of Auction Financing
- Access To A Wide Selection Of Major Brands: Dealerships and showrooms often feature just one or maybe two major brands. Equipment auctions can feature brands across the spectrum so you can choose the best manufacturer for one piece of equipment and a different manufacturer for another and finance them both with the same plan.
- Choose New Or Used: Financing used equipment can be a challenge. Since auctions often have both new and used equipment available, auction financing lets you opt for the best equipment and the best deal.
- One-Stop Shopping: Choosing the right auction financing partner can help you secure the funds to bankroll a large-scale purchase allowing you to get everything you need to operate at auction and only have to manage one financing obligation.
Effective Equipment Financing Solutions With First Capital Leasing
Whether you need new equipment because you are just starting out, you need to replace old and outdated equipment, or you need specialized equipment to grow your business, equipment financing strategies can save you time and money. First Capital Leasing offers customized equipment financing solutions that can be tailored to your company’s needs and budget. Secure the equipment you need without overextending your finances with equipment financing at First Capital Leasing.
First Capital Leasing is a full-scope financial services provider with the knowledge and experience to create tailored financing solutions that meet your needs and your goals for your company. We can help you figure out which strategy can support your current operations now and in the future. We are based in Calgary, but serve businesses across Canada. For easy application and quick approval, fill out our online application. You only need to apply once and First Capital leasing will continue to be your financing partner for all your business equipment needs. Approval can usually be completed in less than 4 hours!* If you are ready to explore loans and leasing for your business, call our team at First Capital Leasing at 1-888-251-3644 or fill out our contact form today.
* Subject to credit approval
FAQ
Q: I already purchased my farm equipment and now I wish I had leased it. What can I do?
A: First Capital Leasing offers sale-leaseback plans. You sell the equipment you own to us, and we lease it back to you at competitive rates. This frees up significant working capital that can be invested in expanding your business.
Q: How does my business explore private sales financing with First Capital?
A: Our process is simple:
- Choose the equipment and the seller of your choice. Confirm the full asset details, along with the cost.
- Complete our online application, which is instantly submitted to our credit team. Existing customers do not need to re-apply.
- Once approved, a First Capital team member will contact you to discuss your financing options. We will then contact your supplier to arrange for invoicing of the purchase. Documentation is then provided for your review.
- Upon receipt of all required documentation, our funding team will work on payment remittal to the supplier. We can accommodate any prepayment or deposit terms the seller requires.
If you have any questions or need more information about which First Capital financial solutions might be right for you, call us at 1-888-251-3644 or fill out our contact form today.
Q: I need a piece of highly specialized equipment. I found it for sale at an upcoming auction. Is there a financing solution for this?
A: First Capital Leasing offers auction financing. With our simple application process, you can be pre-approved prior to auction day so you are ready to bid. Just provide our expert team with the details of the equipment you wish to purchase and we can guide and support you every step of the way. To learn more, read How Auction Financing Can Get You The Equipment You Need.