Thursday, 28th April 2022 | Small business financing Canada,Management
Business equipment financing: what it is and how to get it
Read our blog to get an understanding of business loans and how you can successfully apply for one to expand your locations, hire better staff and invest in better inventory.
What are business equipment loans?
Business equipment loans can come from various places, depending on your credit history and the type of equipment you're looking to buy. Among these sources are:
- Banks
- Credit unions
- Online lenders
- Financiers of equipment
Depending on the nature of the equipment, it may be possible to utilize the equipment as collateral for the loan. In addition, equipment loans can often be for lesser amounts than regular bank loans, depending on the type and cost of the acquired equipment; this might make traditional financing a possibility for qualifying small company borrowers.
Business equipment loans have different terms depending on the lender. Most commercial loans have maximum payback duration of seven years, with interest rates varying based on the lender, your credit history, and the amount borrowed.
To apply for business equipment loans at a credit union, you must first become a member.
Online lenders such as iCapital also provide equipment financing. Rates and periods vary based on the lender you pick, just as they do with traditional lenders. Although interest rates may be higher, online lenders are known for their quick replies, often responding within an hour and depositing funds into your business bank account within a day or two – and sometimes in as little as 24 hours.
While loan conditions vary depending on the lender, most traditional lenders will want a down payment, often about 20% of the loan amount. The interest on business equipment loans, like other loans, is tax-deductible.
Should you get a business loan for your equipment?
Regardless of the sort of business, you run, quality on-site equipment can be rather costly. For example, let's pretend you're setting up a restaurant, bar, or coffee shop. While you may be able to cover certain costs on your own, most industrial kitchen appliances (fridges, beverage dispensers, stoves, and so on) are expensive. Also, don't forget about the cost of production equipment. This is where a business loan can help you and your company open many doors. With a business loan, you'll be able to get the gear you need to increase your profit and sales.
Documents required for equipment business loan
Secured business loan list of items that a lender will ask you for when authorizing a loan.
Personal credit score and company credit score
Lenders will frequently evaluate your credit score and business credit to determine your creditworthiness and the duration for which you’ve run your business.
Business details
Your lender will ask for your business address, business name, business license number, and other information to identify your company.
Financial records
Before approving your firm for financing, a lender will assess your financial health by reviewing specific financial documents to see if you can repay the loan.
- Tax Returns and Bank Statements: Your lender will use these papers to assess your monthly and annual earnings.
- Revenue Statements: Your business's sales records and revenue statements will help your lender comprehend your cash flow, which is crucial in convincing them to lend to you.
Personal financial records
A lender may request your bank statements to evaluate your creditworthiness, especially if you offer a personal guarantee.
Pros and cons of equipment financing
There are several advantages to financing equipment. If the equipment acts as security, these loans may not require collateral. Qualifying for this form of finance may be easier than for other types of funding, especially if you have a newer firm or a less-than-perfect credit history.
However, one thing to think about is what this would entail for your interest rate. If your credit score is near the bottom of the range that the lender typically expects from its clients, you may pay a higher annual percentage rate for equipment financing. The greater the interest rate, the more you'll pay in interest throughout the life of the equipment loan.
How iCapital can help your business
While many types of equipment might deplete your company's budget, this won't be an issue if you pick iCapital to handle your finance needs. And suitable financing isn't the only advantage we have to offer. There are several more reasons to choose iCapital, including but not limited to:
- 5-minute application process
- 24-hour approval
- Up to $250,000 in 48 hours
Remember that iCapital is here to assist you in finding the best financing option for your business equipment loans. All you have to do is contact us today at 1.877.251.7171!
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Customer retention best practices for your small business
In 2023, the business landscape will be more dynamic, with constantly evolving trends and changing customer demands. You can keep your customers engaged and returning for more with the right strategies. Here are some invaluable customer retention best practices to help you stand out from the crowd and keep your customers coming back for more:
Embrace Omnichannel Sales
The pandemic accelerated the shift to online shopping, and customers are now more comfortable than ever buying online. This means providing a seamless experience across all channels, from your website to social media platforms, mobile apps, and online marketplaces. Investing in innovative technologies such as AI and automation can deliver personalized and efficient products that set you apart from the competition.
Use Social Media to Build Relationships
Social media is a powerful tool for building relationships with your customers. You must use social media to build a community around your brand, engage with your customers, and create meaningful relationships. By actively listening to your customers and responding to their queries, feedback, and concerns, you can show that you care and establish trust. Furthermore, social media allows you to showcase your brand's unique personality and values, which can help you stand out from the competition. Sharing customer stories, testimonials, and reviews can also be an effective way to humanize your brand and build social proof.
Leverage Data Analytics
Data analytics can help you understand your customers better and identify opportunities to improve customer retention. You can identify opportunities to improve customer retention and create personalized experiences by tracking customer behaviour, preferences, and feedback. Investing in data analytics tools can help you make data-driven decisions and optimize your marketing and sales strategies to meet your needs.
Be Transparent and Authentic
Customers are increasingly demanding transparency and authenticity from the brands they do business with. Customers are looking for open and honest businesses about their practices, policies, and values. This requires being transparent about pricing, shipping, and returns policies and using authentic and inclusive marketing messages. Doing so can build trust with your customers, which is essential for long-term loyalty. Customers are also more likely to recommend businesses they perceive as transparent and authentic.
Focus on Customer Experience
Customer experience will be a major differentiator for small businesses. As a small business owner, providing exceptional customer experience across all touchpoints should be a top priority. This means investing in customer service training for your staff, optimizing your website for usability, and gathering customer feedback to improve your products and services continuously.
These customer retention best practices can help your small business to stand out from the competition, improve customer loyalty, and grow your business. By embracing omnichannel sales, using social media to build relationships, leveraging data analytics, being transparent and authentic, and focusing on customer experience, you can create a loyal customer base that will continue to do business with you and recommend your brand to others.
Sales ,Marketing ,Management