When it’s time for your business to acquire, upgrade, or replace your heavy equipment, it’s important to understand what financial options are available.
Leveraging heavy equipment financing can help ensure you get the best value when acquiring the assets you need to get the job done. Loans and leases could help provide flexibility and greater access to capital.. Depending on the circumstances, you might have the option to finance used equipment as well.
When you’re beginning the journey to acquire new heavy equipment or machinery, it’s also important to find out how much of a down payment is required at time of purchase and how much the payments would be each month. As a rule of thumb, the payments should not exceed the amount of increased efficiency or revenue derived from the new equipment or machinery. If the payments are higher, then the investment could be a wash.
It’s important to find the right balance of down payment, monthly payment amounts, and term length to fit your business and revenue cycle. A payment calculator and affordability calculator can be essential tools when you’re conducting preliminary research. When you begin your equipment financing journey with Cat Financial, you can use our convenient Affordability Calculator and Payment Calculator. These calculators can help you determine affordability and estimate monthly payments based on your down payment, interest rate, and term length.
Let’s review why these affordability and payment calculators are helpful, how they work, and why special offers should be incorporated to further optimize heavy equipment financing.
With more than 300 machines in the Cat product line, you can find the right Cat equipment you need to get the job done. The Affordability Calculator and Payment Calculator are a great first step to start narrowing down your choices.
With the Affordability Calculator, simply enter your desired monthly payment, for example, $1,000).
Next, enter your desired down payment (for example, $100,000).
Then you enter your desired interest rate (for example, 5%).
Finally, choose the term, (24, 36, 48, 60, or 72 months). You can also include a purchase option.
After inputting this information, the Affordability Calculator provides a rough estimate of how much you can afford to spend on the equipment.
Similarly, the payment calculator can help you estimate your payment amount over the term of a loan or lease. By inputting the total estimated price, down payment, interest rate, and term in months, you can quickly calculate a figure that works best for your company’s budget.
It’s important to keep in mind that the term duration of the heavy equipment loan or lease depends on whether you’re renting or buying, and the length of the machinery’s useful life. Meanwhile, interest rates also vary widely, with the fitness of the borrower/lessee playing a significant role in the ultimate interest rate that is offered.
These easy-to-use online tools let you reconfigure the financial inputs to account for any number of business variables you want to include. You can adjust them until the calculation matches your specific needs.
Once you’ve determined how much you can afford to finance or lease and found that estimated sweet spot for a payment amount and schedule,it’s simple to take the next step and request a quote.
In addition to using these helpful calculators to determine the affordability of the machinery and equipment you want, you shouldn’t forget about special offers from Cat Financial.
These special offers vary depending on when they’re available and which customers and equipment are eligible, but they could provide a great opportunity to help get quality Cat equipment in your hands. Examples of some of these special offers that might be available include a financing offer with zero down or exclusive offers on equipment attachments.
When using the Affordability Calculator and Payment Calculator, be sure to account for these special offers. Some fiddling with the calculators, combined with the right special offer at the right time, can potentially bring all pieces together to finally get the new machinery or equipment your business needs to grow.
No matter your circumstances or heavy equipment needs, we can help you find the financial solution for your company. From equipment equity and ownership to flexibility and a way to free up capital for other expenditures, Cat Financial can help.
With the handy Payment calculator and Affordability Calculator at your disposal, you gain key insight as you make decisions about loans and leases.
Contact your local Cat dealer to learn more about how to most effectively use these calculators for your heavy equipment financing needs.
*Disclaimer: This article is intended to convey general information only and not to provide investment, legal, tax, or accounting advice. All examples are hypothetical and for illustrative purposes only.
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