How can you get capital equipment in a cost effective way? Do you need good credit to rent heavy equipment for your business?
Whether you’re just supporting a family or running a business or just living an average life, keeping all of your finances in order is a learning process. You’ve got to be able to manage your income (assuming it is constant) with all of the bills you have to pay like rent, food, utilities, insurance, and more.
Sometimes, mistakes are made, and you fall behind on payments and lose good faith in the form of credit. Many have, at one point or another, made a mistake and lost points in the credit score, and unfortunately that stays on your history.
That means if you’re planning on starting a business, you’re going to have to deal with that credit score, and that can lead to a host of problems. Many banks give people problems when it comes to credit, meaning you have to be able to do as much as possible solely off of capital.
However, if your business is still in the works and isn’t making money, how can you start the businesses with such a limited capital?
Running a Business
Whether you’re starting a restaurant, truck delivery business, or medical clinic, you’re going to have to do a lot of spending to make things happen. They all need some sort of building or base of operations, the utilities that come with it, furnishings, and more.
You’ll need to hire employees, acquire equipment, buy stock, and pay for any licensing and fees that are necessary to start your company. One of the tougher purchases to make, especially for businesses like these, is equipment, especially when you have to deal with capital equipment.
Capital equipment is hardware that costs thousands of dollars to buy, and with such limited funds to purchase everything for your business, there’s no easy way to get that equipment. Plus, what if you have issues with your credit and have no way to get a good loan for the equipment?
Business owners with equipment needs oftentimes have difficult situations but still need a cost-effective way to get their hardware, and the answer can come through leasing. With an equipment lease, you can get equipment loaned out to you without paying ridiculously high prices.
However, many business owners still want to know do you need good credit to rent heavy equipment?
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How Leasing Works
Equipment leasing is a simple process: you pay a monthly rate, and equipment is loaned out to you. The entire leasing process lasts a certain period of time pre-determined by the contract (usually a few years), and in that time the monthly rate will not increase.
That means you’re paying a low, flat monthly rate to get heavy equipment, versus a large, up-front payment. Plus, leasing offers you other benefits too, like tax deductions just for having a lease, putting money in your pocket every year come tax return time.
Leasing also can offer you other advantages throughout the lease depending on the contract you get, like getting your equipment repaired if it breaks down without having to pay high prices, or getting your equipment upgraded every once in a while so you get the best new technology. With an equipment lease, all the bases are covered and your equipment need is sated without you having to worry about finances.
However, leasing is a contract offered by a leasing company, and that completely depends on the contract you are being offered. It’s completely possible that there are leases out there more suitable for other businesses besides yours, so if you get a lease, make sure it’s suitable for your business before signing the dotted line.
Do you Need Good Credit to Rent Heavy Equipment?
Credit is generally a big concern for business owners, and this is completely understandable considering the issues you generally can run into. If someone has bad credit and goes to get a bank loan to pay for equipment, one of two things will happen, both bad.
Either they won’t get the loan at all, or they’ll get offered a ludicrous deal with a high interest rate on the loan. If you’re purchasing heavy equipment, interest is already going to be bad, and a high interest rate just makes everything worse.
That’s why many business owners want to know do you need good credit to rent heavy equipment, so they avoid dealing with frustrating issues when it comes to their credit score. Since leasing is a contract dealt with on a monthly basis with your payments, there’s no need for your credit to come into play.
Leasing businesses will only do a soft credit check (which doesn’t affect your credit score) to determine how you handle your money, and generally you are not penalized for your credit.
In other words, credit is generally not too much of an issue with a lease, especially for those just starting a business. To learn more about do you need good credit to rent heavy equipment, click here.