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What are the Soft Costs of Financing Business Equipment?

by Financing

When it comes to financing essential business equipment, it’s natural to focus on the hard costs, such as the purchase price, interest rate and repayment terms. However, there is another type of cost that is just as important to consider, yet often overlooked: the soft costs of financing business equipment.

Don’t let the word “soft” fool you. Soft costs can add up quickly and can significantly impact the overall cost of financing your equipment. To avoid surprises, it’s a good idea to familiarize yourself with what the soft costs of financing essential business equipment are, why they are important and how to manage them.

What Are Soft Costs?

Soft costs are indirect costs associated with acquiring and financing essential business equipment. Depending on the type of equipment you’re financing, they can include, but aren’t limited to the following:

  • Legal and accounting fees
  • Appraisal fees
  • Insurance costs
  • Installation and setup
  • Operator training/certification
  • Dealer fees
  • Transportation and delivery fees
  • Taxes
  • Maintenance and repairs
  • Warranties

Unlike hard costs, which are directly tied to the equipment itself, soft costs are not easily quantifiable, and they can vary greatly depending on the financing option you choose.

Why Soft Costs Are Important

Soft costs can be significant, and they can significantly impact the overall cost of financing your equipment. For example, if you choose to finance your equipment through a lease, you may be required to pay appraisal fees and insurance costs, which can add several thousand dollars to the overall cost.

For example, imagine you’re buying a back hoe for your heavy construction company or you’re a physician purchasing an MRI, the soft costs for delivery, installation, transportation, etc. can run upwards of $6,000 to $7,000. When the purpose of financing equipment is to avoid a large capital outlay, these soft costs have a serious financial impact.

In addition to the direct cost impact, soft costs can also impact the timing of your equipment financing. For example, if you need to obtain an appraisal or complete legal paperwork before you can finance your equipment, this can delay the process, which can be costly if you need the equipment to be operational as soon as possible.

How to Manage Soft Costs

The key to managing soft costs is to understand what they are and what they involve. To start, do your research and compare the different financing options available to you. This will help you understand the types of soft costs associated with each option, as well as the costs of financing your equipment overall.

Next, you should work with your equipment vendor and financing provider to identify the soft costs that will be required for your financing. This will give you an accurate picture of the costs involved, and it will help you make informed decisions about how to finance your equipment.

Lenders, like Global Financial & Leasing Services, LLC (GFLS), can include up to 25% of soft costs in the financing. Lenders cannot recoup soft costs. Meaning, if a business owner defaults on the loan, lenders cannot recoup the money spent on transportation, installation, operator training, taxes, and such. Therefore, the exact percent your lender will finance depends on a few factors, including:

  • Your credit rating
  • Type of equipment

LEARN MORE: Can I Finance Equipment with a 640 Credit Score?

Soft Costs Can Add Up to Hard Consequences, Making It Critical to Partner with an Upfront Lender

The soft costs of financing essential business equipment are often overlooked, but they can have a significant impact on the overall cost of financing your equipment. To manage these costs, you need to understand what they are, compare different financing options and consider alternative financing options like those available through GFLS. By taking these steps, you can ensure that you are financing your equipment in the most cost-effective way possible, which will help you achieve your business goals and grow your business.

GFLS provides equipment financing solutions with no hard cap on the amount for a wide range of companies and a wide range of credits with no minimum FICO score requirement. Ready to learn more? Let’s talk about the possibilities. Or, get started today by filling out an online application.

Used plastic bottles in recycling bins for earth day campaign

Equipment Financing for Glass, Plastics and Metals Recycling Businesses

by Financing

Starting or expanding your recycling business can be a profitable and eco-friendly venture, and it’s no secret that the recycling industry is rapidly expanding. The public’s increasing awareness of the environmental impact of glass, plastic and metal waste and the drive towards sustainability has led to a growing demand for recycled products. This has created opportunities for entrepreneurs to start recycling companies and for existing recyclers to expand their operations.

Why Recycling is an Expanding Industry

Recycling is a rapidly growing industry because of the numerous benefits it offers. For starters, it helps to conserve natural resources, as recycled products use less energy to produce compared to the production of new products. Additionally, recycling plastics helps to reduce greenhouse gas emissions, as it reduces the amount of waste that ends up in landfills, where it releases methane, a potent greenhouse gas.

Like most businesses, recyclers create jobs and help stimulate the economy. As the demand for recycled plastic products grows, the need for plastic recycling businesses increases, creating jobs in the collection, sorting, processing and manufacturing of these products.

According to a recent EPA report, on a national average, there are 1.17 jobs, $65,230 wages and $9,420 tax revenues attributable, for every 1,000 (US) tons of recyclables collected and recycled.

Last, but not least, recycling helps to reduce the environmental impact of waste, especially plastic. Plastic is a material that takes hundreds of years to decompose, and the increasing amount of plastic waste in our oceans and landfills is a growing concern. By recycling plastic, we can reduce the amount of plastic waste that ends up in our environment, helping to preserve our planet for future generations. The public, especially Millennials, seek to support companies that have sustainability goals.

Yet, one of the biggest challenges faced by business owners is the cost of recycling equipment, which can run hundreds of thousands of dollars. This is why financing is such a critical component of a recycling business.

Global Financial & Leasing Services (GFLS) provides equipment financing to a wide range of credit tiers. We can finance essential recycling business equipment, such as:

  • Grapples (for loading materials)
  • Loaders (for moving materials)
  • Processors (grinders, melters, etc.)

Traditional Loans for Recycling Business Equipment

Traditional loans from banks and other financial institutions are one of the most common sources of financing for recycling businesses. You can secure a loan by putting up collateral such as property, equipment or inventory. The amount of the loan, the repayment terms and the interest rate will depend on factors such as your credit score, financial history and the size of your business.

Traditional loans are popular because they provide a fixed amount of capital, which makes it easier to budget and plan for the future. Additionally, interest rates are typically lower than other forms of financing, making this option a cost-effective way to finance your business. However, the application process can be lengthy, and the requirements can be strict, which may make it difficult for some businesses to secure a traditional loan.

Leasing Equipment for a Recycling Company

Leasing is another popular financing option for recycling businesses. You can obtain equipment without having to pay the full cost upfront. Instead, you pay a monthly or quarterly fee to the leasing company. At the end of the lease term, you can either buy the equipment for a reduced price, return it, or renew the lease.

Leasing is a good option for businesses that need to upgrade or replace equipment frequently, as it provides more flexibility and avoids the need to tie up capital in equipment that may become obsolete quickly. Additionally, it is typically easier to obtain a lease than a loan, and there is less risk involved, since you are not responsible for the equipment’s depreciation.

LEARN MORE: Loans vs. Leases: Choosing the Right Option for Equipment Financing

Grants for Recycling Initiatives

Grants are a type of financing that is given to businesses and organizations with a specific purpose, such as environmental protection or economic development. There are government and private organizations that provide grants to plastic recycling businesses, which can be used to purchase equipment, research and development or expand operations.

Grants are a great option for businesses that want to start or expand a plastic recycling operation, as they do not need to be repaid. Additionally, grants can help businesses to overcome the financial hurdles associated with starting a new business. However, the application process for grants can be competitive and time-consuming, and there is no guarantee that you will receive the funding you need. Many of them are earmarked for nonprofits or those working directly with local, state or federal government agencies.

GFLS Can Help Your Recycling Company Get the Equipment It Needs

Starting or growing your recycling business can be a rewarding (and profitable) goal, but it requires careful planning and financing. By considering the options of traditional loans, leasing and grants, you can find the right solution for your business and secure the funding you need to purchase the equipment you need. Contact GFLS to explore your financing options and move even closer to contributing to a more sustainable future.

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The Best Equipment Financing Options of 2023 for Business Owners

by Business AdviceEquipment FinancingIndustry News

For many people, the new year is a time for setting personal resolutions. Yet, statistics indicate most people let theirs slide by the end of February. For business owners, it’s not only the start of a new year, it’s first quarter—a time to kick off year-long sales goals, new initiatives and grow your company. Business “resolutions” aren’t as easy to let slip because there are livelihoods, including yours, counting on your follow-through and success.

If 2023 is the year you’re going to need to finance essential equipment to achieve your goals, here are a few of the best options for business owners to consider.

  • Bank loans: You can apply for a loan from a bank or other financial institution to finance your equipment. This option may have a lower interest rate, but the application process can be lengthy, and you may need to provide collateral, as well as meet a minimum credit score requirement.
  • Small business loans: If you are a small business owner, you may be able to qualify for a small business loan from the government or a private lender. These loans are specifically designed to help small businesses finance equipment, among other things. The application process is wieldy and the time can lag between application and funding. Generally, very good to excellent credit is required to qualify.
  • Leasing: Instead of buying the equipment outright, you can lease it from a leasing company. This allows you to use the equipment without having to pay the full purchase price upfront. However, you will need to make regular lease payments and may or may not have the option to purchase the equipment at the end of the lease, depending on how the lease is structured. Another option is to finance the equipment lease.
  • Equipment financing: There are specialized, direct lenders, like Global Financial & Leasing Services (GFLS) who offer equipment financing, which is a loan used for the purpose of buying (or leasing) essential business equipment. The terms of these loans can vary, so it’s important to shop around and compare offers, application processes and customer service to find the best match for your business and credit score.
  • Vendor financing: Some equipment vendors offer financing options to help you purchase their products. This can be a convenient option, but be sure to compare the terms of the vendor’s financing to other options to ensure you are getting the best deal.

Even Those with Less-Than-Perfect Credit Can Qualify for Equipment Financing

If you have credit blemishes, it may be more difficult to secure financing for equipment. However, there are still ways you can get the equipment your business needs this year.

  • Personal loans: If you have a good relationship with a bank or credit union, you may be able to get a personal loan to finance your equipment. The interest rate on a personal loan may be higher if you have B or C tier credit, but it can still be a possibility. Keep in mind that in most cases it’s considered smarter to keep business and personal finances separate. Intertwining the two puts both at risk should one go south.
  • Crowdfunding: If you are unable to secure financing through traditional channels, you may be able to raise funds for your equipment through crowdfunding. There are several crowdfunding platforms that allow business owners and entrepreneurs to pitch their ideas and solicit small investments from a large number of people. Crowdfunding is an option for both new and existing companies, but it’s gained popularity among startups in recent years, and for many has been quite successful in supporting their launch.
  •  Equipment financing: Some equipment financing companies, like GFLS, specialize in working with business owners who have less-than-perfect credit. LEARN MORE: Can I Finance Equipment with a 640 Credit Score?
  • Leasing: Leasing equipment may be a good option if you have bad credit, as the approval process is often less stringent than for a loan. However, as noted above, be aware that you will need to make regular lease payments and may or may not have the option to purchase the equipment at the end of the lease. LEARN MORE: Loans vs. Leases: Choosing the Right Option for Equipment Financing

What Should Business Owners Look for in a Lender?

When looking for a direct lender to finance your equipment, there are five things you should consider:

  1. The interest rate on your loan will directly impact your monthly payments and the overall cost of financing your equipment. Partner with a lender who is willing to help you obtain the best deal for your budget and credit situation.
  2. The loan terms, including the length of the loan and any fees or charges, can significantly affect the overall cost of your equipment financing. Be sure to understand all the terms of the loan before you agree to it.
  3. It’s important to work with a reputable lender with certified professionals who have a history of fair and ethical lending practices. Do some research and read reviews to get a sense of the lender’s reputation.
  4. If you have questions or need help during the loan process, it’s important to work with a lender that has good customer service. Look for a lender who is responsive and willing to help you with any issues that may pop up.
  5. Consider whether the lender is willing to work with you to tailor a loan that meets your specific needs. A lender who is willing to be flexible and find a solution that works for you will be the best fit.

GFLS provides equipment financing solutions with no hard cap on the amount for a wide range of companies and a wide range of credits with no minimum FICO score requirement. Ready to learn more? Let’s talk about the possibilities. Or, get started today by filling out an online application.

The time of 2022 is running out in the hourglass.

Can You Still Get Equipment Financing Approved Before the End of the Year?

by Equipment FinancingFinancing

You Still Have Time For Financing

It’s a time sensitive issue. You’d like to obtain essential business equipment, and you want it on the books for 2022, lock in a lower interest rate before rates rise or both. Time is running out, and considering how long it takes for the majority of lenders, like traditional banks, to approve your equipment financing application, it may seem impossible. Trust us. It’s not too late to get equipment financing approved before the end of the year.

The key is to work with a direct lender, Global Financing & Leasing Services (GFLS), who has the in-house funds and solid relationships with outside banks and institutions necessary to tailor a financing solution to your needs, budget and goals.

One reason our clients rely on us for their financing needs is because we understand time is of the essence. More likely than not, and especially if you want equipment and financing in place by year’s end, you need to choose a lender who works quickly.

At GFLS, we can get back to you with a credit decision in 48 hours or less. With a caveat… you must have the financial documents our team requests ready for review. The quicker we have them; the quicker you receive an equipment financing decision.

An In-Depth Look at GFLS’s Equipment Financing Decision Timeline

For Equipment Financing Worth $75,000 or Less

  • Submit your financing application to GFLS for review
  • Have the following documents ready for review:
    • Last three months of your business’s bank statements
    • A quote/invoice from the vendor for the equipment you’re financing

For Equipment Financing Worth $75,000 Up to $1 Million

Between our available in-house funds and external financial relationships, GFLS can fund equipment financing amounts of up to $1 million. Applications requesting credit over $75,000 require our team review your complete financial picture.

  • Submit your financing application to GFLS for review
  • Have the following documents ready for review:
    • Last three months of your business’s bank statements
    • A quote/invoice from the vendor for the equipment you’re financing
    • Last three years of business tax returns
    • Profit & Loss (P & L) statements for the business

What are Circumstances That Can Delay Getting Equipment Fast?

Even if you have your application submitted, provide all the necessary and/or required documentation and receive financing approval, there are circumstances that can delay getting your essential business equipment outside of yours or your lender’s control, including:

  • Last-minute changes to the equipment order
  • Supply chain issues
  • Shipping delays

Keep in mind that the year you take receipt of the equipment is the year in which you can claim it for tax purposes, so make sure to double check with vendors on their equipment availability and shipping times. While those circumstances are out of our control, if you have your application complete and required documents ready to go, GFLS’s team is ready to help you finance business equipment in the final days and weeks of December.

Have a specific question we can answer for you? Our team is ready to help. Contact us today.

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Construction Business Review Recognizes Global Financial & Leasing Services (GFLS) as a 2022 Top Construction Finance Solutions Provider

by AccoladesFinancing

Congratulations Global Financial

The team at Global Financial & Leasing Services (GFLS) is honored to announce the Construction Business Review named us a Top Construction Finance Solutions Provider for 2022.

As such, GFLS also was featured in an article titled, “Credit Score is No Longer a Problem for Equipment Financing” in a recent edition of their business and technology magazine, which circulates widely in the construction industry.

While construction company owners might be surprised by the concept of being approved for equipment financing based on other criteria beyond their credit scores, GFLS has evaluated small to mid-sized construction companies’ bigger picture to make credit decisions on construction equipment since we started in 2009.

GFLS strives to be a reliable source for not only construction equipment financing, but also critical business information to help our clients better understand how financial and leasing services can affect and grow their companies. Take a recent article we posted: Should You Finance or Buy Heavy Construction Equipment?

Following is the article, in its entirety, published in the Construction Business Review highlighting our financing philosophy and services:

Credit Score is No Longer a Problem for Equipment Financing

Comprehensive financial evaluations have proved decisive in measuring or acknowledging an organization’s credibility. They serve as an assurance for investors and a pipeline for funding innovative products and services. While some small and medium­ sized companies (SME) are eligible for working capital bank loans, SMEs and startups with weak or poor financials and blemished credit history struggle with inadequate access to medium or long-term financing solutions that help invest in newer, better technologies and improved equipment. The hardship of borrowing is further exacerbated due to COVID and economic distress, taking a severe toll on SMEs and impeding their growth.

In view of these obstacles, Arizona­ based Global Financial & Leasing Services, LLC (GFLS) opens the door to numerous financing options that bail out companies from situations that traditional financing companies seldom address. Characterized by increased flexibility in financing compared to conventional banks or other financing companies, GFLS meets the equipment financing needs of SMEs all over the United States by merit of internal GFRS Funds, credit lines, and non-bank financial institutions.

“We listen to our client’s story concerning credit issues and believe our customers are more than a FICO score,” says Jim Jenks, Founder & CEO of GFLS.

Founded in 2009, GFLS is a veteran­ owned company providing equipment financing solutions to various industries, including manufacturing, healthcare, medical, surgical, recycling, construction, commercial landscaping and others. GFLS makes detailed evaluations of clients’ companies to understand the nature of their business in terms of contractual obligation, cash flows, collateral, and other prerequisites to deduce a suitable financing solution.

GFLS follows a stepwise process for assessing credit applications. At the start of an evaluation, the company looks through recent bank statements, an invoice or quote from the vendor for the procurement of equipment and when appropriate the tax returns, financial statements, and other required information. An elaborate interaction with the applicant follows this assessment to understand the nature of the business, challenges, and purpose of the equipment for the growth of the company. Based on these evaluations, its credit committee makes an informed decision about the procurement and, if positive, generates a financing contract and from the signed agreement, with a purchase order (PO) of the equipment.

The company’s differentiated approach from traditional financing organizations allows them to enjoy an in-depth understanding of clients’ past problems in cash flow and the steps they have taken to overcome such challenges. For instance, a Midwest-based construction company needed GFLS’ financing solutions to procure various pieces of construction equipment and was not able to obtain credit from other sources owing to their FICO score and similar credit issues. GFLS financed them with over a quarter of a million dollars, having garnered a thorough understanding of their business and the value it would potentially generate. As a result, the client company has attracted additional contracts and digital business since the collaboration, attracting more businesses to partner and collaborate for mutual growth.

Emerging as an active contributor of equipment financing solutions, GFLS has created a reputation in the industry, with which it acknowledges the developmental and innovative strides taken by a business, a stark contrast to evaluating them based on credit ratings. GFLS evaluates the customer’s business objectives, extends additional support to mitigate impediments, and provides professional, actionable insights geared toward enterprise growth.

Think You Won’t Qualify for Heavy Construction Equipment Financing? It’s Time to Rethink Your Options

Your construction company is unique and deserves financing solutions to fit its operations and your growth plans. GFLS looks beyond a credit score. We customize financing options based on your overall business’s health.

GFLS is a trusted source for construction equipment financing, and we can help you obtain the financing you need to add new or used equipment to your fleet.

The process is simple. Submit your financing application. More often than not, we approve your application regardless of your credit score. If you have tried other lenders who rejected your request, consider GFLS.

Contact us today for more information regarding our construction equipment financing.

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Should You Finance or Buy Heavy Construction Equipment?

by Equipment FinancingFinancing

Your construction company needs heavy equipment. Maybe you’re expanding, want the opportunity to bid a certain project, or intend to competitively position your company for earning government contracts associated with the Infrastructure Investment and Jobs Act (IIJA).

Your first, and maybe most important, decision is how to pay for the construction equipment. As you well know, heavy construction equipment is a significant investment, which comes with a hefty sales price. Should you finance or purchase it outright?

Even if you have the cash on hand to outright purchase heavy construction equipment, there are a few reasons not to make that large of a capital outlay. Many economists predict the U.S. will experience a recession. Jim Jenks, Global Leasing & Financial Services founder and CEO says, “In this economy, conserving your cash is critical. Over the next two years business owners will want to stretch their cash flow rather than sink it into hard assets, which diminishes the cash you might need down the road.”

Buying your heavy construction equipment may very well put your business in a precarious position when/if our economy goes into a recession. However, there are other reasons that make financing a heavy equipment purchase a smart decision, including:

  • Monthly payments are easier to budget for and manage. Financing your heavy construction equipment means you make set monthly payments for a set period of time. This allows you to budget for the long-term, as well as bid projects in a way that covers your equipment payments. Financing lets you extend paying for a major purchase over the course of years, and hopefully fund the payments with project revenues.
  • Expand your heavy construction equipment fleet faster. Yes, cash is king. It’s also a limited resource. Purchasing equipment outright depletes your cash, limiting your ability to grow your fleet as quickly as you might like. For most construction business owners, it is far more realistic to finance multiple pieces of heavy equipment at a time than pay cash for each of them. Carefully review your finances to ensure that you can manage multiple monthly payments.
  • Maintain your company’s financial flexibility. Financing allows you to reserve cash on hand to ride out a slow month or quarter, hire additional staff to take on new projects, or purchase additional materials or assets needed to successfully bid on a potentially lucrative project.
  • The outcome is the same whether you purchase outright or finance your heavy construction equipment. Financing heavy equipment can result in the same outcome an outright purchase does. Meaning, you can still own the equipment at the end of your financing agreement. Or, you can start the financing process all over again with a new or upgraded piece of equipment.

Explore Your Heavy Construction Equipment Financing Options

Every construction company is unique and must match its financing solutions to its operations and growth plans. Beware of lenders who offer limited or one-size-fits-all financing options. Instead find a partner, like Global Financial & Leasing Services (GFLS) who looks at your business holistically and on its own merit to customize your financing.

GFLS is a trusted source for construction equipment financing, helping companies secure the financing they need to obtain reliable new or used equipment. As a direct lender, we use in-house funds for financing equipment, as well as our relationships with banks and other institutions, so we can create the perfect financing plan for you.

The process is simple. After you submit your financing application, we will quickly review it and give you a decision. More often than not, we approve businesses regardless of their credit. If you have tried other lenders who rejected your request, consider working with us.

With GFLS, you can:

  • Get competitive rates, as well as 100% financing
  • Benefit from tax deductions on essential-use equipment
  • Avoid down payments; we ask for your first payment in advance, and then you can pay once you receive money
  • Save your cash
  • Maintain or establish your credit through leasing
  • Obtain equipment while it is current without making big purchases that will soon become obsolete
  • Purchase the heavy equipment after the financing agreement ends

Work with a company you can trust for all of your construction equipment financing needs—GFLS. Contact us today for more information regarding our construction equipment financing.

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The Growing Urgency to Find Equipment Financing Loans

by Equipment Financing

Last month, Goldman Sachs CEO, David Solomon told Reuters he believed there is a “reasonable chance of a recession in the U.S., but it’s not certain.” His statement is in line with what others in the financial industry are predicting. Fitch Ratings reported the U.S. economy will experience a recession beginning the second-quarter of 2023, but robust U.S. consumer finances will help soften its impact.

Meanwhile, the Federal Reserve has increased interest rates five times in 2022 alone, bringing up rates three percentage points this year, the most in a single year since the 1980s. The Fed showed signs of increasing rates by another 1.25 percentage points before the end of 2022, bringing the federal funds rate to 4.25-4.5 percent.

What are business owners who know they need to finance essential business equipment to do?

“If you’re balancing risks and you get less worried about the economy slowing and more worried about inflation just staying high and getting built in to the price and wage-setting process, then you might conclude you need to move faster,” says Bill English, finance professor at the Yale School of Management, who spent 20 years at the Fed. “Lags just make the problem harder because you have to be forward-looking and judge where the economy is going to be.”

“You Need to Move Faster”

Interest rates will not drop any time soon, that’s for certain. Locking in a lower equipment financing rate now will save you money compared to financing later at a higher rate. Not only do you benefit from lower rates before the Fed raises them again, you also gain the advantage of being able to competitively positioning your company against others who might choose to wait out high interest rates. With financed equipment, you could offer products or services your competitors don’t or at a price they can’t match.

An Equipment Financing Loan Lets You Reserve Cash

Financing allows you to keep cash on hand to ride out a slow month or quarter, hire or retain staff, or purchase materials or assets needed to bid on and win a revenue-generating project. With a recession looming, conserving your cash is important. Over the next two years business owners will want to stretch their cash flow, which isn’t possible if it’s spent on an equipment purchase.

Where You Can Find Equipment Financing Loans and Get Approved Quickly

Bank and Credit Union Equipment Financing

Banks and credit unions offer equipment financing loans. Unless your credit score falls in the good or excellent range, financing equipment through them is difficult or impossible since they usually approve applicants with top-tier credit scores.

If your credit score meets bank or credit union qualifications, expect a lot of paperwork and a long wait time for approval. If you have an urgent need for business equipment, don’t have a sizable down payment, don’t want liens placed on other business or personal assets or have credit blemishes, traditional bank or credit union equipment financing isn’t your best option.

Vendor Equipment Financing

Equipment vendors can suffer during a recession due to lower sales volume. Vendors create equipment financing programs through direct lenders, like Global Financial & Leasing Services (GFLS). These programs benefit both you and venders. You can explore financing a higher priced piece of equipment rather than settle for less expensive machinery priced within a traditional bank’s amount they approve you for. You may have more flexibility, especially when the vendor works with a lending partner committed to closing sales. You might even be able to take advantage of sales and discounts vendors offer to boost sales during a recession.

SBA Equipment Financing

SBA loans are an option if you have excellent credit and are growing or expanding business and need equipment to do so. But, the application and approval process can take months, and the majority of applicants are denied due to bad credit, character issues, lack of collateral, insufficient revenue or capital to repay, and inability to repay due to other outstanding loan payments.

Direct Lender Equipment Financing

GFLS is a direct lender, providing funding opportunities that typical banks don’t. In certain situations, we can use our connections to numerous banks and institutions to offer you the best financing solution for your credit profile. In the end, you get the right financing for your needs and faster access to the funds.

If you’re interested in getting equipment financing before rates go up again, our process is simple and streamlined. Talk to one of our equipment lease financing experts at 480.478.7400 or start your application today.

Left and right road sign on the road

When Is Financing Equipment a Smart Choice for Small Business?

by Benefits of LeasingBusiness Advice

Buying essential business equipment can be a very expensive endeavor. More often than not, small business owners cannot afford to purchase the equipment outright. Even when they can, rarely do they feel comfortable draining their cash reserves. Whether you can afford to purchase equipment outright or not, oftentimes the smart choice is to finance it.

Four Reasons Financing Equipment is Smart Choice

1. Buying is too expensive considering the equipment’s useful lifespan.

Consider the last time you got a new phone. As soon as you plunk down the money for an upgrade, you know it’s only a matter of time before you do it all over again. Multiply that cost and that’s how it is for many big equipment purchases. With phones costing $1,000+ today, many people are financing them. They save a large initial purchase and instead make monthly payments. At the end of the lease, they can upgrade and the process starts all over again. Do you own it? No. But do you want to own that outdated phone four years from now? Probably not.

2. The equipment is just too expensive to buy outright, period.

If your small business requires specific equipment to operate, that’s considered essential business equipment. For example, those in the restaurant, logging, manufacturing, healthcare, and such need expensive equipment. Without it, there is no business. However, the lack of cash doesn’t have to keep you from getting that equipment if you finance it.

3. Purchasing drains cash reserves, which could be used to take advantage of opportunities that arise—opportunities that require cash and don’t have the option of financing.

Leaving your small business cash poor could prevent you from advertising and marketing, recruiting new employees, etc. Also, in this economy, conserving your cash is critical. Over the next two years you will want to stretch your cash flow rather than sink it into hard assets which depletes cash you might need later on.

READ MORE: Think Equipment Financing Before Dipping into Cash Reserves

4. It may offer tax credits.

Equipment financing can be eligible for tax credits. You may be able to deduct your payments as a business expense by taking advantage of Section 179 qualified financing deductions.

What Small Business Owners Should Know About Equipment Financing

Essentially, equipment leasing means you are renting the equipment rather than purchasing it outright. You rent the equipment for a specified time period, and then you return the equipment, renew your lease or buy it.

Equipment renting is not the same as equipment financing. When you finance equipment, you take out a loan to purchase the equipment and pay that loan back monthly over a set period of time. The equipment is the collateral used to secure the loan, and you own the equipment after the loan is repaid.

Since equipment rental is not a loan, it won’t appear on your credit report. Thus, it won’t inhibit you from taking out a business loan for other purposes.

How to Choose a Reputable Lender

The best lenders are those, like Global Financial & Leasing Services (GFLS), who see themselves as your business partner—one who understands your business and industry. Our equipment financing services extend to a variety of industries, including:

  • Automotive
  • Cannabis
  • Construction
  • Forestry/Logging
  • Healthcare/Medical
  • Machinery/Manufacturing
  • Recycling/Waste industry
  • Restaurant
  • Titled Vehicles
  • Transportation Equipment

GFLS is a direct funder, providing funding opportunities that typical banks don’t. In certain situations, we can use our connections to numerous banks and institutions to offer you the best financing solution for your credit profile. In the end, you get the right financing for your needs and budget.

Our process is simple and streamlined so you have a decision often in 72 hours or less. Talk to one of our equipment financing experts at 480.478.7400 or start your application today.

loan-lease

Loans vs. Leases: Choosing the Right Option for Equipment Financing

by Business AdviceEquipment Financing

With so many financing options available from a variety of lending sources today, it’s easy to be overwhelmed by choices, especially considering you’re making a serious financial commitment. While you’re weighing choices, your business lacks the equipment needed to launch or grow. If you’ve been trying to decide whether to rent, finance or purchase outright the essential business equipment your company needs, we hope this article makes the decision a lot easier for you.

Let’s take the business factor out of the equation. That way you can better understand your equipment financing options because you’ve probably already made similar choices in your personal life. For example, you had reasons for choosing where you live and what you drive. If you rent your home, essentially you are leasing it from the owner, be it a house or apartment. You can live there as long as you pay your monthly rent, and the owner still owns the property at the end of your lease. If you pay a mortgage, you took out a loan with a lender who gave you the money to buy your home. Once you pay the lender back, you own your property. Same goes for your vehicle. You chose to lease or buy it. If you lease it, you’ll return it at the lease’s end. If you bought it, you either paid cash or took out a loan and make payments, after which you’ll own it.

Why rent versus buy a home? There are many reasons, including saving up for a down payment, a rent payment being more affordable than a mortgage, ensuring what you buy meets your long-term needs and goals, etc.

Why lease versus buy a vehicle? Again, there are many reasons, such as high usage results in wear and tear you don’t want to be responsible for and the vehicle you need in the short-term isn’t the one you’ll need in the future.

If you think about how to finance your essential business equipment in those same ways, deciding between renting, financing or an outright purchase becomes much easier.

Questions to ask yourself before deciding whether to finance an equipment lease or loan:

Do you want to own the equipment eventually? If yes, then financing an equipment loan is right for you. Like a mortgage or car loan, once your loan is paid off, the equipment is yours.

Do you have a down payment or sufficient collateral to qualify for an equipment loan? If not, then financing may be your best bet for getting the equipment your business needs. The additional revenue generated from having essential equipment can be saved for purchasing equipment down the road.

Is the equipment something you’ll use for years or is it the type that is often updated, requiring you to upgrade? If you intend to keep the equipment for a while, an equipment loan makes sense. If you know you’ll need to upgrade the equipment to stay competitive (like medical equipment), financing an equipment lease makes sense because you can return the equipment at the lease’s end and upgrade at that point.

If You Decide to Finance, You Have Two Choices, an Operating or Capital Lease

Operating leases typically have lower monthly payments and you have the choice to either relinquish the equipment at the end of the lease term or buy it at fair market value.

Capital leases generally have higher monthly payments. Although a capital lease is much like a loan, you don’t include it on your balance sheet during the lease term. At the end of the lease, you can buy the equipment for a nominal price, such as $1 or a percentage of the purchase price.

Bottom line: If you decide to finance, consider a lease, as you will be often expensing the rental payments like any other operating expense as you use the equipment.

If You Decide to Take Out a Loan, Understand the Lender’s Requirements

If you choose an equipment loan, your lender will front the money to purchase your piece of equipment. Depending on your lender, you can finance all or most of the purchase price. Like a home or car loan, you’ll pay any down payment, if required, and make monthly payments that cover principle and interest. After the loan’s paid off, you own the equipment outright.

READ MORE: With Inflation and Rising Interest Rates, Is Now a Good Time to Finance Equipment for Your Business?

Our Team is Here to Help

Many small and medium-sized businesses prefer Global Financial & Leasing Services (GFLS) to traditional banks or alternative online lenders due to our easy application process, holistic decision-making and personalized approach to lending. Our equipment financing experts listen to your needs and goals to find a solution that works not only for your budget, but also to meet your short and long-term business goals.

GLFS’s credit application process is designed to be as streamlined as possible, while still giving us a full picture of your business and needs. We understand that time is of the essence when running a business, so we often can get back to you with a credit decision within 72 hours.

Contact us to learn more about how we can help your business.