What To Do When Equipment Financing for New Business

Every year, countless startups are founded, with business owners hoping to build a long-lasting, profitable company. But unfortunately, most of these new businesses fail very quickly. Within the first year, 10% of startups go out of business, and after the first five years, 80% cease to operate. Due to this high level of risk, it can be hard to get equipment financing for new business.

This is a problem because most startups don’t have the funds necessary to purchase all their equipment. Trying to buy everything in cash can slow you down and prevent you from succeeding. So, what should you do? Fortunately, there are some leasing companies that are willing to lend to new businesses, as long as the owners have a strong financial background and are willing to act as guarantors. Read on to find out how you can get equipment financing.

Can a New Business Get Their Equipment Financed?

If you’ve ever tried setting up a new business, you’ll know how challenging it is to gain access to all the equipment you need. You might have to rent a physical space, purchase office furniture, buy specialized machinery, and acquire computers for all your employees. The cost of these items adds up, and financing some of them can take a lot of the pressure off. But what should you do if most lenders won’t consider you because your company is new?

The answer is that you should keep looking for a suitable lender. There are leasing firms out there who are happy to lend to new businesses, as long as the CEOs provide enough documentation to prove that the business idea is sound. At Noreast Capital, we will consider you if you have a strong financial background and are able to provide a personal guarantee.

How to Get Equipment Financing for New Business

Getting equipment financing can be harder for a brand-new business, but don’t let that deter you because the benefits of leasing some of your items are significant. To get started, you’ll have to make sure all your paperwork is in order, so you can see what assets your company already has and what is still needed. Then, you should consider what type of equipment you would like to lease.

Purchasing some items outright and leasing others could be a good idea because it allows you to reduce the total cost of starting your business, but you won’t have to go into too much debt. Once you’ve determined what you need and what you can afford, you can reach out to an equipment financing expert, who will help you apply for a loan or lease and work with you as you get your line of credit set up.

Get the Paperwork in Order

Before you speak to a leasing company to finance heavy equipment for instance, you need to make sure that your business plan is sound and that you can afford a lease. At Noreast Capital, we usually ask startups to provide us with their supplier contracts, pro forma financial statements, and business plans. If we believe that you don’t have a good foundation to build your company on, we might not be able to provide you with a lease.

Additionally, you should check up on your personal finances. The owner of a brand-new business almost always needs to provide a personal guarantee, but this only works out if he or she has some assets. If you have savings you could use towards the loan or lease if necessary, we are much more likely to issue credit than if you have no money available should your business fail.

Figure Out What You Need

A good leasing company like Noreast Capital will be able to meet your needs no matter what type of items you require. We lease a wide variety of equipment, from office furniture to electronic devices to specialized kitchen equipment. We can also provide you with heavy machinery for construction and with software for accounting, keeping track of client relationships, and more.

Take stock of what assets your business already has, then make a list of the items you still need. You can estimate what each one costs to determine how much debt you will need to take on.

Consider Purchasing Some Assets and Financing Others

No matter what industry you’re in, starting a new company is hard. To get over the initial challenges, many of the smartest CEOs combine equipment financing for new business with purchasing some assets outright. This can be a great option because it allows you to get everything you need without spending all your money or going into too much debt.

The smaller the lease or loan amount, the bigger the chance that we are able to issue it. If you come to us asking for less than $50,000, it’s more than likely that we can help you out. However, brand-new businesses that ask for more than $100,000 are sometimes rejected because the risk level is too high. Once you’re more established, you can always come back to Noreast Capital and ask for a bigger lease.

Reach Out to an Equipment Financing Expert

Once you’ve gone through your paperwork and determined which pieces of equipment you’d like to lease, you can get in touch with us by sending us an email, calling, or filling in the contact form. Your assigned case manager will get back to you as soon as possible and discuss your options. Because we offer leases for a wide variety of businesses, you’ll almost certainly find something to suit you.

For example, startups often choose a step payment lease. The repayments on this lease start low and increase over time. That way, you have time to build up a customer base and make a profit before you have to start paying us. Other businesses choose a seasonal lease, which can be tailored to the fluctuations in income a business experiences. This option is particularly good for seasonal businesses like accountants.

Why Should a New Company Finance Equipment?

Equipment financing for new business is extremely popular. But is it a good option for you? Why should a new company lease its equipment instead of buying it? There are many reasons, but some of the most compelling ones are that a lease reduces your initial funding needs, allows you to remain flexible and current, and facilitates the expansion of your business.

Reduce Your Funding Needs

There are various ways small businesses acquire the funds they need to get started. You might have an investor who is willing to lend you the money, or you might have launched a crowdfunding campaign. But since so many companies are looking for funding, there is a lot of competition, and it can be hard to access enough cash to purchase everything you need.

By choosing to lease or borrow some of your items, you can lower the initial cost of your startup. As profits start to come in, you can then pay off the equipment. This allows you to get set up with a lot less and therefore makes your plan more realistic.

Remain Flexible and Current

Flexibility is one of the most important characteristics of a successful small company. Every year, there are technological advances that change the business landscape considerably. Therefore, firms that want to remain profitable in the long term must be flexible and willing to move with the times. When you buy expensive equipment outright, this can be a big challenge because you’ll need to use it for many years to make your investment pay off.

In contrast, a lease can be as short as 12 months. If you decide that you want to take your business in a different direction, you can simply return the items and choose different ones that better fit your needs.

Expand Your Business Faster

Once you’ve started making a profit, you might want to expand your business further. This could involve offering a new product or service, hiring more employees, or even opening a new office or shop in a different location.

If you’ve been leasing some of your equipment, it’s likely that you have been able to save a larger percentage of your profits instead of spending them on purchasing items outright. This makes the expansion easier and faster. What’s more, you’ll already have a line of credit open with your leasing company, so you don’t have to go through the application process again.

Get the Financing You Need

Getting equipment financing for new business can be hard because they are perceived as very risky. Because 80% of startups fail within the first five years, many leasing companies aren’t willing to lend any money to businesses without a proven track record. However, some lenders will allow you to access equipment financing if you have a good financial background and are happy to act as a guarantor for your company.

To get started, you should make sure all your paperwork is in order. You’ll also have to take stock of your needs and decide which items you want to purchase outright and which ones you want to lease. Then, you can reach out to us, providing all the necessary details. We will assign you a case manager, who can take you through the application process. Call or email us today at Noreast Capital to find out what kind of lease you can access.

How Can I Affordably Lease Equipment as a Small Business?

With a market size of $178bn, the US leasing industry is enormous. Millions of small and large companies lease their equipment every year, thus benefitting from lower upfront operating costs and access to better equipment and increased security. Whether you’re an established small business in your community or you’re just starting out, business equipment leasing could be the way for you to grow your revenue over the coming months.

Getting a lease isn’t very difficult, especially if you can prove that your company is profitable and that you can easily keep up with your monthly payments. A reputable equipment leasing firm like Noreast can approve you within a few days. That way, there won’t be any delays, and you can begin building your business right away. In today’s post, we’ll have a closer look at how leasing works and why it could be the best choice for you.

What Steps Do I Have to Take to Lease Equipment?

If you’re a small business that is well-respected in your local community, it won’t be hard for you to obtain the equipment you need. In fact, we work with both established and up-and-coming firms, as long as the founders can prove that they are financially stable. To make the application process as simple as possible, you should make sure you have all the relevant documents in place before you get in touch.

Once you’ve decided what equipment you’d like to lease and what your budget is, you can reach out to us at Noreast, and we will assign one of our professionals to your account. This leasing specialist will take you through your application process and help you select the best options. If you have special requirements, they can adjust the terms of your lease to suit your business model.

Take Stock of Your Financial Situation

Before you reach out to us, you should make sure you understand your company’s financial situation. Put together all the documents you might need during the application process, such as your trade references, bank statements, and financial statements. If you have been in operation for over two years and are looking for a small lease, it’s likely that we won’t ask you for much documentation.

However, new companies are considered riskier, so you may need to provide a personal guarantee if you are a startup. When the owners of a business provide us with such a guarantee, they prove to us that they are confident in the success of their firm and serious about their lease. Depending on the situation, we may also require business plans, supplier contracts, and pro forma financial statements.

Decide What Equipment You’d Like to Lease

Our customers lease all kinds of equipment from us. Sometimes, they come to us with a very specific need, for example, if they have been asked to complete a project that requires equipment they don’t own. But at other times, firms are either starting up or expanding and need a wide array of tools. Aside from office furniture, we also offer security equipment and specialized tools for catering businesses and construction companies.

In fact, you can even lease software from us, for example for accounting, advertising, graphic design, or business management. If you’re not sure which items you’d like to lease, make a list of everything you’ll need to run or expand your business. Then, you can decide which pieces of equipment could be leased.

Find a Reputable Business Equipment Leasing Company

There are many lenders out there that offer leases, and some specialty equipment stores have their own programs. But small businesses are almost always best served by an equipment leasing company that offers a broad range of products. Here at Noreast, we can help you find tools, machinery, and software, and you won’t have to deal with each vendor individually.

When you reach out to us, we will assign you a specialist who can take you through the various options. They will discuss the items you’d like to lease and work with you to find the best brands for your business. Then, they can help you compile all the documents you need for your application. Instead of having to deal with various vendors’ requirements and customer service teams, you will always work with the same person when you reach out to us.

Determine the Terms of Your Lease

Not every lease is right for every business, and we’ve developed a wide range of agreements that can suit various situations. The most common lease term is 36 months, although you might opt for 12 months if you anticipate a change in your business or 60 months if you know you’ll use the piece of equipment for a long time. Depending on your situation, payments will be monthly, quarterly, or even annual.

We also offer step payments, which start out low and then increase over time, and delayed payments, which allow businesses to use the equipment for several months before they start paying. Such arrangements are especially suitable for startups and firms that anticipate steep growth in the near future.

Apply for Your Lease

With the help of your assigned business equipment leasing professional, you will select the products you need and then complete your application. You will need to state when you’d like to start using your items, where you need them delivered, and what you will do with them. We will perform a credit check and verify your documents to make sure you’ll be able to pay.

It shouldn’t take more than a few days for you to receive an answer from us. We will provide you with a lease agreement, which you can sign and send back to us. We can then provide you with your equipment as soon as you’ve paid the security deposit.

What Are the Advantages of Leasing Equipment?

Business equipment leasing is straightforward and practical. Whenever you need new furniture, tools, or machinery, you can speak to your experts at Noreast and request a new lease.

Because you don’t need to pay for your items in full upfront when leasing, you will have more capital available to expand your business. What’s more, you may be able to access better equipment than you otherwise could, and you won’t be putting yourself or your firm at risk in the process.

Greater Liquidity

The main reason why people opt for a lease to finance heavy equipment is that it allows them to control their expenses more easily. When you’re just starting out or you’d like to expand your business, you might not have the necessary capital available to purchase all the equipment you need. With a lease, you can avoid a lengthy fundraising process and grow your operations much more quickly.

Because you and the leasing company will agree on the terms in advance, you’ll know what your future monthly expenses are. This allows you to budget and manage your company’s finances better.

Access to Better Equipment

If you purchase a piece of equipment, you want to maximize your investment. It can take years for you to make a profit after buying several pieces of heavy machinery. This can be a big problem because businesses and industries change on a regular basis. Over time, you might want to modify the way your company operates, but this is hard to do when you own a lot of expensive equipment.

When you lease, you can avoid this problem because you can give back your equipment once the term is up. That way, your business retains its flexibility. If you decide that you want to go in a different direction, you can quickly and easily purchase new equipment, and if you no longer need an item, you can give it back without losing money.

Lower Risk to You and Your Business

Business owners who work with a great leasing company such as Noreast don’t run the risk of purchasing substandard equipment. We only work with the best vendors, so you’re sure to be happy with the quality of your items.

What’s more, we will take care of any problems. Companies who lease don’t have to worry about their equipment malfunctioning because the lender is there to assist them. If your machine or software doesn’t live up to your expectations, you can simply get in touch with your account manager. They will help you resolve the issue and make sure that your piece of equipment works well.

Consider Leasing

A wide variety of businesses, from catering firms to building companies, lease their equipment. By working with a reputable business equipment leasing company, you can lower your upfront costs, gain access to the high-quality equipment you need, and lower your company’s risk levels. The process is very easy and only takes a few days, which prevents any delays to your upgrade or expansion.

The best way to get started is to figure out what equipment you need and then discuss your options with our experts.┬áCall us now at Noreast Capital Corporation to find out more about the various leases we offer. We will assign one of our professionals to you and they’ll handle all matters related to your account. That way, we can better tailor our services to your needs, and you can always reach out to the same person whenever you have a question.