This blog was updated on 6/6/2023.
Getting ready to buy heavy equipment? There are plenty of financing deals out there, but don’t get too far ahead of yourself. Before you start talking with potential lenders or signing up for the latest offer, make sure you’ve answered these four questions.
1. Have I considered all the options?
Maybe buying a new machine is exactly what you need. But you might be equally successful with a low-hour used model, a certified rebuilt machine or a long-term rental. There are multiple paths to success. Review all your options before making a final decision.
2. What can I afford?
Many considerations affect affordability: cash flow, down payment size, interest rates, contract terms and more. Make sure to factor the costs of technology, maintenance, repairs, insurance and storage into your assessment, too. Working within a set budget? Use this online affordability calculator for an estimate of how much machine you can afford.
3. How will the monthly payment fit into my budget?
Equipment loans and leases come with different sets of advantages. A loan allows you to build equity. A lease generally offers a lower monthly payment. Weigh the options side by side to determine which makes the most sense for your business. To see how changes in price, down payment, interest rate and other factors might affect your monthly payment, plug your numbers into this payment calculator.
4. What’s my credit score? Are there any issues I may need to explain?
It’s a good idea to review your credit report before reaching out to a lender. That way, you can correct any inaccuracies and update any information that’s no longer current or relevant. You’ll also get a heads up about any negative things in the report, so you can prepare to explain them if necessary. Curious what lenders really look for when reviewing your credit application? Here are the factors the team at Cat Financial takes into account.
Now you’re ready to take the next step — exploring current equipment offers and finding yourself a financing partner. If you’re new to equipment financing, this guide will help you get started.
This blog was updated on 6/6/2023.
