Practical Options For Affordable Construction Equipment Financing
The machinery and tools that your company has on hand can make a big impact on what kinds of jobs you can bid on and accept. You want to be able to bid and take on plenty of projects throughout the year and turn a profit. However, if you lack certain machines and tools, you need to find a way to purchase them without sacrificing your cash flow. You can use several practical options for cost-effective construction equipment financing.
One of the easiest ways to raise cash for construction equipment financing involves factoring in your unpaid invoices. If you have invoices that previous clients have not yet paid in full, you can sell them to a factor, who in turn will pay you close to all of what the invoices are worth. A factor is a financier that buys unpaid invoices from companies. This financier pays clients the value of the invoices at a slight discount. In most cases, you can get almost the full value of what your unpaid invoices are priced at and pay a small commission on this type of financing.
Factoring is not a loan that must be paid back. It also typically does not involve a credit check. The amount of money that you get will largely be based on how much your unpaid invoices are worth. Further, you can typically get the money from factoring in a matter of days. You avoid having to collect on those invoices and can use the cash for construction equipment financing without the hassle of paying back a loan.
If you cannot use factoring, you could take out a loan and use the machines and tools that you want to buy as collateral. This type of loan most often can be found directly through the equipment manufacturer or dealer. The financier of the machines and tools will use the equipment that you want to buy to secure your construction equipment financing.
Finally, you can take out an unsecured loan at a bank or credit union. This type of financing may require that you have a high credit score and sufficient income coming into your business to secure, however.
These options allow you to utilize construction equipment financing. You can factor in unpaid invoices to raise cash quickly. You can also take out a loan using the equipment as collateral or apply for unsecured financing. Speak with a professional for more information.