A lot of businesses require different pieces of material handling equipment. They need it to move, store, and otherwise handle materials, supplies, and more. Some examples include industrial shelves, forklifts, conveyor belts, loading dock fixtures, storage containers, specialty racks, and platform lifters to name but a few. As you can imagine, these are expensive pieces of equipment. Hence, material handling equipment financing is usually required.
What Is Material Handling Equipment Financing?
There are many different institutions that financially help businesses and companies get off the ground. They know that offering finance ensures that small businesses can grow. At the same time, they understand that there are significant risks associated with offering loans to new companies, or even existing companies for that matter, so they put policies and procedures in place for their own protection.
There are, therefore different categories of material handling equipment financing. Those are:
- The operating lease, whereby businesses can get equipment and tools they wouldn’t otherwise be able to afford.
- The small value loan, which enables businesses to fully purchase not just the equipment, but also to pay for secondary costs such as training, sales tax, installation, freight, and so on.
- The hire purchase, which is a form of lease financing. This means businesses know at which price they will receive their tools and equipment, but they have varying installments to pay it off, never fully owning the equipment unless they make a balloon payment at the end of their lease. Leasing is highly flexible and ensures that it is much easier to balance the books as more disposable income remains within the company. Furthermore, leasing provides interesting tax returns. It is also 100% deductible, as an operating expense. Furthermore, with most leases, it is possible to upgrade the technology as the lease continues.
- The term loan, which is similar to the small value loan but with different conditions.
- The bill discount, which is very rare.
There are numerous different financial constructions available, all designed to ensure companies are able to grow and develop. This is, naturally, hugely important for the overall economy. Financial institutions understand that startup companies need money to get off the ground, and that existing companies need money to grow and expand. Hence, they are happy to provide finance options for the important pieces of equipment, particularly if they can profit from that themselves.
As there are so many different options available for you to finance your equipment, you may feel a little bit overwhelmed with the different options that are out there. The internet is a useful resource to help you find the different companies that are out there. Moreover, the internet can help you gain a greater understanding of what you should look for in these types of companies, and you can use it to find reviews left by previous customers. With a little bit of research, you should be able to find the right finance option out there for you.