Purchasing new equipment is one of the most significant strains on any small business. Most small business owners are forced to seek financing options just to be able to afford new equipment at all. Most people immediately look toward traditional loans, and while they are always a good choice, there are many other options to consider when financing equipment. Here are 4 types of equipment financing you should consider.

Commercial Chattel Mortgage

A chattel mortgage is similar to a traditional mortgage, although it involves a business taking part ownership in the equipment they are leasing. They purchase the equipment using funds lent by the lender at the time of purchase. The lender then uses the situation to take a mortgage out on the piece of equipment being financed and secures that mortgage with the piece of equipment, and the payments from the business.

Equipment Rental

Equipment rental is a great option for anyone requiring equipment for a short amount of time. Equipment rental usually offers a fixed interest rate and is very upfront about all fees that will be charged. When equipment is being rented, the equipment is not seen as an asset of the business, but as an asset of the owner. Because of this, the equipment cannot be seized by any institution.

Cashflow Funding

Equipment financing through cash flow funding is an incredibly creative financing solution. This involves borrowing money based on the estimated future revenue for your business. This allows for more flexibility in terms and lowers interest rates. Cashflow funding has a very fast approval turnaround as well as improves your business’s average cash flow statistics over time.

Equipment Lease

Leasing your equipment is a great way to reduce total costs for your business. By leasing instead of owning, you can about large down payments. You can also be better positioned for equipment upgrades going forward, as you will not have to purchase new equipment every time you need to upgrade. This is a great option for those in industries that require up-to-date equipment to maximize revenue and to compete with other businesses.

These are the 4 main types of equipment financing. By taking advantage of one or all of these innovating financing options, you can better position your business to maintain the proper equipment at the right price for years to come. Hopefully, you are now able to make informed decisions when it comes to financing equipment.