Purchasing equipment finance can be a bit of a minefield, especially for new businesses still finding their feet.
That said, with the right advice and mindset, figuring out which finance options are right for you can be as easily done as it is said.
Below, we've listed 5 key things you have to keep in mind when you're thinking of making an equipment finance purchase.
1. Understand Your Business’ Reality
Ever heard the saying "Turnover is vanity, profit is sanity"? It applies to small businesses the most. That's because, in order to thrive and grow, you cannot hide behind vanity statistics and have to face reality head on.
You’ve got to have self-awareness: make sure you know where your business is financially.
Understand your objectives and work out exactly what you want to get out of your equipment finance loan before you start.
Is it productivity, success within your vertical, beating a competitor with cutting-edge equipment?
Ensure you have the answers to these questions before signing on the dotted line.
2. Get An External Point of View
People are too worried about asking for the council - it's because they’re afraid of the answer. Clear that mindset from your thinking and suddenly you’ll be stopping people on the street asking for their advice.
When it comes to equipment finance, a big commitment to your business, it's important you recognise the input of others, whether that's your business partner, the cleaner or your significant other. On a more professional level, there are external consultants who’ll advise you in more depth - which is something worth considering.
One of the most practical ways of getting a good idea of your business is through a cost-benefit analysis - this way you’ve got a clear set of pros and cons written down for you to refer to at times when you think you might get carried away with the price.
To be successful, to be competitive… hell, to be relevant, in whatever industry you operate in, you need to be leading innovation. To innovate you need the best equipment which is why financing the best stuff for your business is so important.
Counsel with people, plan but don't always play it safe, use the opportunity of equipment finance to push for innovation - your new equipment could help automate time-consuming tasks, speed up processes that out-of-date machinery struggle to do or help with your research & development.
4. Keep It Clean, Keep It Green
It sort of frowned upon nowadays if the equipment you finance isn’t environmentally friendly. While you’re there, why not boast about the fact you’re going eco-friendly and green, it might be a good way of driving a bit of traffic to your site and social media. Away from the reputation factor, going green with your equipment is far cheaper in the long run and the equipment is usually far more advanced than it's eco-unfriendly counterparts.
5. Know Your Options
There are a few legitimate options when it comes to financing and each of them has their advantages and disadvantages it's important you have a clear view.
You own the equipment as soon as you hand over the money, basically. You own for as long as you want and you’re responsible for whatever running costs may occur. At Love Finance we offer 100% financing for the cost of the purchase as well as the possibility of additional financing for other costs like installation, transportation and training.
If you go down this route, your payments are lower than if you had purchased the equipment outright. You won’t ever ‘own’ the equipment outright but that's not really the point of leasing, the point of leasing is that you only ever pay small monthly costs, rather than a huge initial outlay. At Love Finance we leasing from rates as low as 3.5%, as well as this we have broken ground with our As-A-Service model. This means that all your transport, maintenance, installation and support costs, along with any other costs that are associated with the equipment your financing, are included.
Lesser known but still worth consideration. Renting is an option for equipment that quickly becomes obsolete or is needed for a specific task/project.
There are loads of other tips to consider but we thought these 5 were the most important for you to keep in mind - if you can think of any others let us know!