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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 suitable for you can be as quickly done as it is said.
Below, we've listed five key things you have to keep in mind when you're thinking of making an equipment finance purchase.
1. Understand Your Business’ Reality
Have you ever heard the saying, "Turnover is vanity, profit is sanity"? It applies to small businesses the most. That's because, 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 viable.
Understand your objectives and work out precisely what you want to get out of your equipment finance loan before starting.
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 because they’re afraid of the answer. Clear that mindset from your thinking, and suddenly you’ll be stopping people on the street from asking for their advice.
When it comes to equipment finance, a significant commitment to your business, it's essential you recognise the input of others, whether that's your business partner, the cleaner or your significant other. On a more professional level, some external consultants advise you in more depth, which is 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.
3. Innovate with better equipment
To be successful, competitive… hell, and relevant in whatever industry you operate in, you need to lead innovation. To innovate, you need the best equipment, so 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finance to push for innovation - your new equipment could help automate time-consuming tasks, speed up processes that out-of-date machinery struggle to do or help with your research & development.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 is 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. Going green with your equipment is far cheaper in the long run away from the reputation factor, and the equipment is usually far more advanced than its eco-unfriendly counterparts.
5. Know Your Options
There are a few legitimate options for financing, and each of them has its advantages and disadvantages. It's essential that you have a clear view.
You own the equipment as soon as you hand over the money. 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 and the possibility of additional funding for other expenses 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 the point of leasing; the end of leasing is that you only ever pay small monthly costs rather than a substantial initial outlay. At Love Finance, we lease from rates as low as 2.9%, 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, and any other costs associated with the equipment you are 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 lots more tips to consider, but we thought these five were the most important for you to keep in mind - if you can think of any others, let us know!