Steps To Get Financing for Used Equipment

Steps To Get Financing for Used Equipment
Author: Small Business Expert | August 19, 2020 | Topic: Used Equipment

Steps To Get Financing for Used Equipment

There’s a huge market for used equipment in the construction and earthmoving industries because of its value and affordability. If you’re a business leader who’s looking to finance or lease equipment, it can be challenging to find lenders who are up to the task.

Some providers are hesitant to finance machinery that’s over a certain age because it’s more likely to fail if it’s older. You do have options, though — as long as you know how to navigate the market! Here’s a quick guide to used equipment financing if you’re interested in expanding your fleet.

 

1. Know How Much You’re Willing to Spend

Before you can start looking at used equipment leasing or financing options, you need a budget. Any loan you take from a lender is money you’ll have to be able to pay back. Otherwise, the equipment could be repossessed in the future.

When you finance a piece of equipment, you may have to provide a down payment and then make regular payments over the course of a specific term period. Your first order of business will be deciding how much you want to pay upfront and how much you can afford at each payment.

 

2. Find Out What Your Options Are

In most cases, how long you can finance used equipment and how flexible your rates are depends on who you’re working with. Most used equipment repayment periods range from one to three years with variable interest rates, although terms can exceed 10 years in some cases.

While exploring your options, it’s important to consider the age of the equipment that you’re financing. Anything that’s older than 10 years is at a higher risk of failure. The older a piece of equipment is, the more challenging it can be to find affordable financing.

 

3. Make Sure You Meet the Qualifications

To finance used equipment, you’ll most likely need to fill out an application. Whether or not you’re accepted for financing may depend on a few factors, such as your credit score and the past success of your business. Some financing resources are willing to work with younger businesses, while others require you to have a certain amount of history.

Make sure to shop around and look for the best offers.

 

4. Talk to Your Dealer

The most important part of getting a lease or loan for used equipment is talking to your dealer or provider. For example, Cat Financial gives you access to financing options for a variety of used equipment when you work with a Cat® dealer.

Knowing what options are available and having a clear idea of the payments and interest rates will help you earn the best possible return on investment.

Contact Your Cat® Dealer Today

Used equipment leasing and financing is easy at your local Cat dealer. To learn more about how you can finance high-quality used machinery, find a Cat dealer in your area today.