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Equipment Loan vs. Lease: Which is Better for Your Business?

Men talking about an equipment loan

When you’re just starting your business, you’re expected to spend more than you earn. This means you will probably find yourself needing to purchase essentials for your operations, whether they’re specialized tools, heavy machinery, or transport vehicles. However, you may not have the capital at the moment to buy them.

Fortunately, you can opt to get equipment loans or equipment leasing to acquire much-needed tools for your business. Learn what kind of financing options are available to you.

Understanding Equipment Loans & Equipment Leasing

Equipment Loans

An equipment loan for a small business, also referred to as equipment financing, allows you to buy the tools and equipment you need. Your lender will give you the capital to purchase the tools or equipment as a loan specific for the items you need to operate or update.

The amount you receive is based on your plan and the lender’s terms, allowing you to borrow most or all of the total value you need. Once you’ve completed your repayment, you will fully own the tools or equipment you bought.

Equipment Leasing

Equipment leasing for a small business is different in that you won’t own the tools or equipment outright. With this option, your chosen lender will buy what you need from a vendor before renting it out to you every month. At the end of your lease contract, you have the option to renew, return, or purchase the tools or equipment.

What Are the Advantages to Equipment Leasing or Equipment Financing?

Although both options allow you to use the latest tools and equipment in your operations, their structures provide different advantages that are worth understanding.

The Advantages of Equipment Financing

  • No Need for Cash on Hand: One of the reasons this is considered one of the best financing options for a business is that you don’t have to pay any upfront costs, giving you instant access to the loan after your application gets approved.
  • Tax Incentives: Equipment financing is ideal for small businesses because it can be filed as a tax deduction, allowing you to lower your annual tax liability.
  • Less Documentation Needed: Unlike traditional loans where lenders require your entire financial history and credit score, equipment financing is more favorable and forgiving to small businesses. Most lenders simply need you to make your repayments on time.

The Advantages of Equipment Leasing

  • Use Current Technology: Equipment leasing is ideal for small businesses that need to stay up-to-date with the latest tools and equipment in their industries. It lets you use the most current technology without the cost and commitment of buying them.
  • Flexible Cash Flow: Equipment leasing doesn’t require a down payment, allowing you to use your cash on hand to pay for other needs such as payroll, bills, and inventory.

Which is Better for Your Small Business?

When deciding on a business financing solution, you should consider your immediate needs and how to best address them.

Whichever option you choose, you should remember that it will only be as good as the lender you choose! Probably is your partner in growing your business for both equipment financing or equipment leasing!

Learn more about our funding and term loans when you get in touch with us today!
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Pros & Cons of Bridge Loans for Small Businesses

Bridge Loans for Small Businesses in a conference room

At a certain point, you might need to start spending more money on your business in order to make money in your business. But acquiring the capital for your growth plans can be difficult. With daily operating costs and other expenses, you need to find a new source of income or financing.

Borrowing money is nothing new in the world of business. Many do this to start an entrepreneurial career, while others do so to fund their expansion. No matter why you decide to take out a loan, you have to choose it carefully.

Bridging the Gap between Financing & Business Growth

Many financing solutions have become available to business owners recently. One of them is the bridge loan. But what is a bridge loan?

A bridge loan is a short-term loan that provides quick funding while you look for a more permanent solution. Business owners use it to handle an existing obligation and reduce their obstacles in the long run. It’s becoming common among small businesses, but before you take out a bridge loan, it’s essential to study its benefits and terms.

Here are the advantages and disadvantages of a bridge loan.

Benefits of a Bridge Loan:

Bridge Loans are a fast way to get funding for your immediate needs.

The whole process—application, approval, and funding—is faster than most other types of loans because our bridge loans have fewer requirements. This gives you the capital to purchase new or additional equipment, pay for inventory, or meet your payroll needs without affecting your bottom line.

Bridge Loans give you full control over your business.

For most loans, you have to sign over a portion of your business as collateral. But a bridge loan from Probably may only last a year, meaning you can quickly pay it back without having to relinquish control over your business.

Bridge Loans give you a safety net for other expenses.

As a small business, you are often at risk of running out of cash. Our bridge loans give you access to money that can be used to cover pertinent expenses. It’s a practical and valuable solution for businesses that have long payment cycles.

Potential Cons of a Bridge Loan:

It might have larger payments.

Since a bridge loan runs for a shorter period, you might be charged more during monthly repayments if you don’t choose a good company to work with, and understand their terms. Late payments will be met with penalties and higher interest rates as well. Make sure you work with someone trusted and transparent, like Probably, to ensure you get the best deal!

It could be risky for your short-term bottom line.

Business owners who take out a bridge loan while waiting on an extended payment cycle are at risk of failing to see that long-term money at the end. And when payments fall through, you will have to make your loan payments out of pocket. This is the risk with any loan, but is still worth mentioning. As always, only borrow what you expect to be able to pay back.

Work with Probably for a Trusted, Transparent Bridge Loan

Probably is dedicated to helping small business owners transform their start-ups into strong and sustainable organizations. Our bridge loans are customized to each client, giving them what they need without causing disruptions in their operations and cash flow.

If you need additional capital for your business, consider applying for a bridge loan from Probably today!
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What Alternatives Are There to SBA Financing?

SBA Financing building

The past year has been tough for small businesses and aspiring entrepreneurs. The pandemic has forced multiple business sectors into dire financial situations due to public restrictions and safety protocols. At the height of the pandemic restrictions in March and April, small businesses in the United States were pushed to their limit. 

According to a survey at the time, more than 7.5 million small businesses were in danger of closing permanently due to the shutdown. 

However, these enterprises could turn to the Small Business Administration for financing. This organization has been trying to help small businesses for years and tried to provide a beacon of hope through uncertain times in 2020. But not every small business meets the SBA’s rigorous requirements to secure a loan, in fact – most don’t. And even if they do meet requirements, there simply isn’t enough money to go around, as was seen in 2020 when the SBA quickly ran out of stimulus and PPP funds.

So, what alternatives are available for entrepreneurs who need small business loans? 

Below are a few options you can explore if SBA financing isn’t possible.

1. Personal Loans

Your first alternative is to take out a loan yourself. This means that your personal credit history and credit worthiness will be scrutinized by banks and other organizations, rather than your small business’s profitability. If you have a stellar credit score, you could be fast-tracked for adequate loans to use to finance your business – but most people don’t have a great credit score, and it can be quite risky.

The downside of personal loans means that if you don’t manage to recoup your losses and revitalize your business, the obligation and consequences falls on your head, and on your collateral. This can mean liquidating personal assets, such as cars and residential property to pay for the loans should you fail to do so.

This is why personal loans are ultimately highly risky, and are only really used in dire times.

2. Loans from Friends & Family

If you don’t want to put your personal property at stake or your credit score isn’t up to par to secure personal loans, you can turn to people close to you for financial support. However, many people feel uncomfortable securing loans from their relatives or friends, as this simply moves the risk to them.

However, a benefit is that you can negotiate lower interest rates or find alternative methods for repayment in some scenarios. You could ask them to become investors, giving them a stake in your business in exchange for their loans too – though this still has the risk of losing it all (yours and theirs) if the business cannot be revitalized.

The key to borrowing from close friends and relatives is to be transparent about the odds of your business recouping its loss. You should also be diligent in making payments to avoid personal drama infiltrating your business.

3. Term Loans

If your business isn’t in financial trouble now, but you can see the writing on the wall, you may have time for a lengthy alternative to SBA financing. Term loans are one such option. 

You still have to meet the requirements for borrowing from the lender and wait through the lengthy application processes, but this might be quicker than an SBA loan in many situations.

These types of loans typically shell out higher amounts and come with low interest rates. However, they do tend to be more thorough with their assessment as they want to ensure you can return their money in due course. 

4. Equipment Financing

Sometimes your business model may not seem highly profitable to others and can torpedo your hopes for securing SBA financing or even other financial support. However, you can still turn to an alternative that does not take into account your business status or profitability as much. 

If your small business uses expensive equipment for its production process, you can use equipment financing to take out loans. These types of loans use your machinery as collateral, and your other assets won’t be part of the process.

This type of financing can be quicker, thanks to minimal paperwork. But you will be expected to provide a down payment. Some companies even require a down payment as a step in their process.

5. Online Loan Providers or Alternative Financing

If your business isn’t eligible for SBA financing and you don’t qualify for a personal bank loan, or it seems too risky, then you can turn to the internet for help!

Probably Yes offers quick and streamlined small business loans as a needed alternative to SBA loans, personal loans, or asking friends and family.

Our applications can take only a day or two for approval! Plus, we don’t need the extensive collateral that many others require. Some online small business loans have high interest rates, or prepayment fees in case you pay them back early – but not Probably!

Be sure you choose a reputable online lender like Probably Yes, and always check reviews, affiliates, and history to ensure you are getting your loan through a company that doesn’t cut corners.

Contact Probably Yes For Your Small Business Loan + An Alternative to SBA Loans

Times have gotten tough for small businesses, but there is hope on the horizon!

Thanks to the efforts of the private and the public sector, these uncertain times may end in the foreseeable future. However, until that happens, consider a seamless online small business loan provider to stay afloat with financing options that work for you. 

We make small business loans fast and easy. We’ll work with you to help you get the working capital you need when you need it. Call Probably at (844) 940-2303 today.

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How to Successfully Launch a Startup During a Pandemic

Launch a Startup on a laptop

The recent pandemic may hopefully be coming to a close because of the vaccines. However, its effects on public health and businesses are nearly-irreversible.

Despite the impacts of the COVID pandemic, many business owners and entrepreneurs are finding ways to continue to serve consumers’ needs 

Sure, starting a small business in the midst of a health crisis may be deemed risky by some, but it’s definitely doable. A variety of business types can thrive during and beyond a pandemic with enough time, effort, and research.

Here’s how to do it.

Get With the Times

If you want your business to be in-demand, you need to cater your products and services to the needs of your customers during this pandemic. Your enterprise should also offer goods or services that are still going to relevant and helpful beyond the current health crisis.

Business types that attain this balance include:

  • Delivery Services — If you’re looking to create a company that greatly benefits your fellow business owners in your community, start a delivery service. A lot of small to medium enterprises are forced to provide delivery options for their goods. Plus, a lot of logistics companies are backlogged because of COVID-19 restrictions in their workplace. You can build a fleet of bike or motorcycle riders that can provide fast and efficient delivery for restaurants and retail stores. If you want to focus on business-to-business customers, then you may want to switch to a van or truck fleet, as they often need to transport products in bulk.
  • Cleaning Services — The pandemic has seen a rise in demand for cleaning services. Commercial and residential property owners alike are looking for crews that can not only clean up but also disinfect the surfaces in their homes and offices. If you have the knowledge and experience in this field, starting a cleaning business and training employees on the best sanitation practices should be a breeze.
  • Mask Making — Masks are especially helpful during this pandemic, as they minimize the spread of the virus. There’s also a demand for them beyond these unprecedented times, as there are some people whose immune system is sensitive to particles in the air, like pollen and bacteria. The Centers for Disease Control and Prevention (CDC) has a great guide on how to make sewn cloth masks. If you want to stand out from the competition, print or sew unique graphics and patterns on the masks.

Implement Social Distancing Measures & Explain Them Through Your Value Proposition to Give Your Customers Confidence

The last thing you want is for your business to be closed down after just a couple of days because you violated social distancing orders. Being complicit to the spread of a virus like COVID-19 in your place of business is not a good look, too.

Here are some social distancing guidelines to consider:

  • Keep a distance of six feet from each other. This applies to both employees and customers. The fewer the people in the establishment, the better.
  • Provide handwashing and sanitation stations for employees and customers to wash their hands.
  • Direct employees and customers to wear a mask at all times in your place of business.

Take Your Business Processes Online

Because going outside isn’t always safe, people are starting to prefer buying products and services online. This means your business needs to be on the web, too.

Create an online store using e-commerce platforms, like Shopify and Squarespace. Take cashless payments using online gateways like PayPal, Venmo, and CashApp. Instead of using traditional advertisements like flyers and posters, get your customers’ attention through digital marketing methods. Get your business to the top of search engine results and your customers’ social media timelines, and you’re sure to get more sales or at least inquiries.

Digitizing your business processes also makes it future-proof. After all, over 74 percent of people already buy products online. It’s not only safer because of the pandemic, it’s also easier and more convenient overall.

Probably Yes Can Help Fund Your Startup & Get You the Equipment You Need!

With a business type that fits the needs of people during this health crisis, has solid online business processes, and follows proper social distancing measures, your business is sure to weather this storm and thrive beyond it!

Let Probably help you get the funding you need for your startup. We make small business loans easy. Call us today for details.

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Small Businesses & COVID-19: Your Government Funding Options

new building for small businesses

The safety measures and mandatory closures due to COVID-19 hit plenty of businesses, especially small businesses. The outbreak resulted in many small businesses dealing with unprecedented economic disruption, causing many to stop their operations temporarily or for good.

Outgoing President Donald Trump signed into law the CARES Act last March 27, 2020. The Act allotted $376 billion in relief for small businesses and American workers. Apart from the traditional SBA funding programs, the 2020 CARES Act also established temporary funding programs to assist small businesses during the COVID-19 pandemic.

However, as we know, the needs typically outweigh the available resources with these government programs. Therefore, it is important to understand all of your financing options, whether government-funded or not.

Paycheck Protection Program

The U.S. Small Business Administration (SBA) will grant loans of up to $10 million to eligible small businesses. With the Paycheck Protection Program, the SBA can also provide a direct incentive for small businesses to fund their payrolls.

The SBA can forgive Paycheck Protection Program loans if small businesses meet the employee retention criteria and use the loan for eligible expenses.

Other details about the PPP include:

  • Paycheck Protection Program loans have an interest rate of one percent (1%).
  • Loan payments can be deferred for borrowers who apply for loan forgiveness until the Small Business Administration pays the borrowed amount to the lender. 
  • Loans issued before June 5 can mature in two years. Loans issued after June 5 have a maturity of five years.
  • PPP loans do not require personal guarantees or collateral.
  • Private and government lenders will not charge small businesses any fees.

To apply, approach any SBA 7(a) lender or any federally-insured credit union or depository institution. Once you are successfully enrolled in the program, you gain immediate access to the loans.

Economic Injury Disaster Loans

This loan offers funds to small businesses and non-profit organizations struggling with a temporary loss of revenue. The EIDL assists applicants to meet operating expenses and financial obligations that could have been met had a disaster not occurred.

The loan’s terms include:

  • 30 years maturity
  • 3.75 percent for businesses
  • 2.75 for non-profit organizations
  • No pre-payment fees or penalties

Even if your business is denied, you can still apply for this grant, which can be used to maintain payroll, pay for employees on sick leave, and other relevant expenses.

SBA Debt Relief

As part of the Small Business Administration’s COVID-19 debt relief efforts, the organization will pay six months of interest, fees, and other operational fees that small businesses owe for all Microloans, 7(a) and 504. This relief, however, is unavailable for EIDL or PPP loans.

Borrowers don’t have to apply for this assistance. It automatically provides the following:

  • SBA will make payments with the next payment due on the loan.
  • If your loan is currently on deferment, the SBA will pay within the next payment due to the end of the deferment period.

Alternative Funding Options

Although the U.S. government is working to help small businesses with funds once again, this can take time – lots of time.

At Probably we offer working capital loans and small business loans to small business owners without the wait or snags, up to $500,00 0 in as little as one business day.

If you are in need of quick funding, Probably Yes is at your service. We provide quick and easy small business loans. Benefit from simple processes, flexible options, and immediate access to the funding you need. Apply for a loan today.

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Working Capital Loan Considerations: What You Need to Know

Working Capital Loan business

Small business owners have plenty of things to manage to keep their business growing. From a budget standpoint, there are many factors to consider in terms of equipment costs, inventory, payroll expenses, and other financial considerations. When you’re caught in the middle of these financial matters, consider applying for a working capital loan.

Working capital ensures that you will have enough cash flow to successfully run your business. Small business loans are often the best solutions if you suddenly find yourself in a tight situation financially.

With that in mind, here are things to consider before applying for a working capital loan.

The Amount of Funding You Need

Some lenders offer a maximum loan amount in the range of $150,000 to $200,000. Before you apply for one, evaluate your available funds, determine the amount you need, and finalize the purpose of the loan.

Borrowing not enough or too much can hurt your business. Instead of dealing with debt or fund shortages in the future, consult with a lender before moving forward. A lender will talk about your business’ needs before recommending loans and rates, as well as help you determine the loan amount that works best for your current financial situation.

When Do You Need the Funds?

If you need immediate funding, perhaps a traditional bank loan or an SBA loan is not the way to go. These loans can take weeks of processing before you receive any funds. The shortest waiting time for these types of loans is three days to a week.

Instead, look for a lender that can give you money within a few days, or even on the same day. These types of loans, however, may require applicants to offer collateral before they get funding.

Settle Unpaid Debt

Having unpaid debt could prevent you from getting approval for a working capital loan. If you have financial concerns like credit card loans or debts, lenders may be hesitant to work with you. Generally, it’s a good idea to pay off your debt first to improve your chances of approval.

Determine Your Lender’s Expectations

Every lender has a different set of requirements. You may work with a traditional bank that prefers bank statements, excellent credit, and a business plan. Other lenders may require you to earn a specific amount of revenue tied to the length of time you’ve been in business. Here are other requirements lenders may ask from you:

  • Invoice history
  • Tax records
  • Credit score
  • Business plan
  • Bank statements
  • Collateral
  • Personal guarantee
  • Annual revenue

Determine the Loan’s Specifics

It’s important to know the length of time you’ll need the funds. Most small business owners need short-term funding to draw a check or to bridge a gap between jobs. Most lenders, however, do not offer short-term financing solutions. If you need a custom solution, get in touch with a lender immediately to discuss your options.

Once you’ve settled these considerations, you can have a good chance of getting that much-needed working capital loan. It’s best to work with a lender who can help determine your needs. They can help you sort through your options, work out a payment plan, and make sure you get the capital you need ASAP.

When you need funds fast, Probably has got your back. We make quick small business loans easy with our flexible options and simple processes.

Get started with your loan today.

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Small Business Loan Success Stories During a Pandemic

man applying for a Small Business Loan on a laptop

The COVID-19 pandemic has affected schools, healthcare, restaurants, small businesses, and our economy as a whole. But not every company is suffering, or in a slump, in fact, there are many business industries and ideas that have taken off or seen an uptick in business in 2020!

So, from our Probably team to you, here is some much needed good news in our latest article on small business loan success stories during a pandemic!

Apply Now!

Small Business Loans Can Help Your Business Pivot & Succeed

Restaurants Have Gotten Creative:

Many businesses had to get creative this year, from pickup and delivery options to outdoor seating in areas that usually do not allow it or have limited space.

Some cities implemented ‘outdoor refreshment areas’ where open container avenues were put in place, allowing for bars and breweries to serve to-go cocktails and beers as patrons stayed outside or walked around the city.

Other restaurants created take-home meal options and kits so their loyal customers could still enjoy their food, hot and ready, in their own homes with little preparation or labor.

Still, other restaurants created to-go cocktails, gift packages, or pivoted from only dining to utilizing their ingredients for other creations – like using kitchen stables to create bat bombs or incense cones.

Many Other Industries Have Stepped Up As Well:

Moving to remote work or utilizing virtual assistance in therapies, education, even training programs – online and teleservices have grown hugely in the past year due to shutdowns and social distancing guidelines.

And while this is amazingly creative and shows the flexibility and resiliency of our small business owners – this type of strategy change requires equipment and inventory or additional capital to get off the ground.

Unfortunately, we have seen many small businesses that were denied the initial funds to get the equipment needed – but not from Probably!

We always work hard to be able to say “yes” to your small business and equipment loan needs!

A Small Business Loan From Probably Can Get You the Capital You Need to Reach Your Customers, Even During a Pandemic

Simple, fast, and flexible – our small business loans were designed to help you get the capital you need to reach your new goals and implement your new ideas right when you need to!

We believe cash flow or long applications and waiting shouldn’t keep you from reaching goals, especially in trying times like now. That’s why we made our small business loans and equipment financing options quick and easy, because with Probably, we give you the freedom to grow your business the way you want, with the funding you need right now.

Our clients can use their funds to invest in equipment, creative new developments, online and traditional marketing, and more. Plus, unlike traditional lenders, we want to help you grow your business fast, which is why we have always offered lightning fast small business loans, as well as alternative business funding solutions.

Probably Small Business Loan Benefits

  • Receive funds as quickly as one business day, up to $500,000*
  • Simple application process
  • Use your business loan as you see fit
  • Build your credit profile
  • No prepayment penalties

Apply Now!

Three More Ways to Succeed in 2021 & Beyond:

1. Remember That Your Most Valuable Asset is Your People

Your greatest asset is your team, so make sure you let them know and keep your strong, loyal team happy and safe. Having a team who cares, is invested, and believes in your business’s services, products, or mission can get you and your business over almost any hurdle.

Take care of your employees and they will care for your customers, clients, and ultimately, your business. At Probably, we believe that a strong team wins every time.

2. Listen to What Your Customers Say

The best way to plan for what your clients and customers want from your business, or how you can alter your services to meet their needs, is by asking them and then listening.

Don’t just guess at what you should do, be social and ask exactly what people want to see. This can be as in-depth as a survey email campaign, or as simple as asking your regulars what they would like to see in a friendly conversation.

If you take care of your team and listen to your customers, then you are already set up for a successful 2021.

3. Plan for the Future, But Stay Flexible & Creative

Still have your strategic planning meetings and layout for 2021, but remember to stay flexible and open to market changes, as we aren’t out of the woods yet from COVID-19, and there may still be some curveballs at the beginning of 2021.

If you fail to plan, then you plan to fail, but if you are too set in your ways to see opportunities or to swerve when needed, you may be caught flat-footed as well. This year (and next) is all about balance and finding your equilibrium between stability and flexibility.

Probably & Our Small Business Loans Are Here to Provide Stability & Flexibility into 2021!

Contact Probably to learn more about our equipment loans and small business loans
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How to Manage Your Working Capital & Avoid Deficits

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The working capital is one of the biggest points of concern for any business. Big or small, enterprises need to maintain a healthy flow of working capital. Although business experts say that negative working capital doesn’t necessarily mean the business is doomed, it should at least keep the sales and account managers on their toes. 

What Is Working Capital?

Working capital is the cash fund that sustains your everyday operations. It is a measure of a company’s liquidity: higher working capital means a company’s earnings are greater than its liabilities. Working capital is used to pay off short-term debts, buy inventory, and pay for everyday operating expenses.

When the working capital is running short, businesses apply for working capital loans from banks or non-institutional lenders. 

If you look up working capital loan definitions and uses, you’ll notice that many consider it a short-term remedy to cover the costs of daily operating expenses. It’s mainly because working capital loans must be repaid in less than a year. Businesses, therefore, cannot depend on working capital loans for long-term funding needs.  

Manage Your Working Capital to Maximize Working Capital Loans

Businesses that get approved for working capital loans must work doubly hard to regain their financial health. They need to maximize their loans and generate revenue from them so that they can pay the loan on time and have a net income. 

For business owners and entrepreneurs who want to avoid risks, the goal regarding working capital should always be to avoid deficits.

How do you manage your working capital loan? Here are some tips:

1. Be smart in stocking inventory

You have to closely examine if the cost-savings from bulk-buying a raw material is more beneficial than equally distributing resources for purchasing all materials needed for production, for example. If you are a retailer, you’ll want to increase the inventory of your in-demand products to make sure that you don’t run out of stocks and potentially shake the confidence of long-established partners and customers. Similarly, you don’t want to waste money on stocks that don’t sell well. 

2. Prioritize your key suppliers and pay them on time

This is to ensure that your business relationship stays strong. If you have a good relationship with your vendors, you’ll be in a better position to negotiate for more favorable contracts later.

3. Follow-up on your receivables

Make sure you’re sending invoices on time and take note of delinquent payments. Not to say that you must be aggressive in collecting delinquent payments, but neither should you be too lax that others are taking advantage of your generosity. Draw the line between gestures of good faith and savvy business management. 

4. Increase your working capital

Look for other ways for your business to increase its income besides improving your process for receivables. Some options you can consider are selling long-term assets, refinancing debts, making personal investments (i.e., put your personal money into the business), and getting equity funding by inviting investors to your business.

Contact Probably Yes for More Information on Our Working Capital Loans

Managing your working capital, especially the funds you receive from a working capital loan, is crucial for ensuring your business’s success. 

If you need to increase your working capital as soon as possible, consider applying for a working capital loan from Probably. We specialize in financing startups and expansion plans of small businesses. 

Explore our funding options. Apply for a working capital loan today.

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Starting a Business? Here’s Why You Should Get an Equipment Loan

Equipment Loan building for startups

Financing is the biggest problem of startups. Aspiring entrepreneurs are wary of going all-in on a business venture using their own money since they aren’t sure how successful their business will turn out.   

Many first-time entrepreneurs shop around for startup loans to get their business off the ground. One financing solution worth considering is an equipment loan.

How Does Equipment Financing Work?

Equipment loans for startup businesses help the borrower acquire physical assets for the company. It can range from ovens and stoves in a restaurant, computers, and servers in an IT firm, or heavy machinery for a construction company.

Equipment for commercial operations can get extremely expensive. The cost of acquiring physical assets might exceed your separate startup loan amount, which is why many consider taking out an equipment loan.

The lender usually places a lien on the equipment you buy, allowing it to serve as collateral for your loan. This gives the lender the right to repossess and resell the equipment if you default on your loan.

Equipment Loan VS. Equipment Lease

Apart from loans, another form of equipment financing is leasing. Equipment loans often include monthly payments over a long, fixed term. You’ll need to make a down payment of at least 15 percent on the equipment in most cases.

On the other hand, equipment leases let you rent a physical asset from a vendor. The cost of the equipment plus interest fees are spread out during your lease term. However, you don’t own the equipment at the end of your lease term, unlike if you get a loan. Your vendor might allow you to buy the piece once your lease agreement ends.

Between the two financing options, an equipment loan is the wiser long-term choice. Your monthly payments for the loan eventually let you own the equipment, unlike in a lease where you’re only paying for the right to use the asset.

Below are additional advantages of getting an equipment loan.

1. Flexible Payment Options

Most equipment financing lenders give you the option to pay monthly, quarterly, or annually. This flexible schedule lets you align your payments with the projected revenues of your startup.

2. No Additional Collateral

You won’t be required to put up a personal asset as collateral for the loan since a lien is already placed on the equipment you buy. It minimizes the risk involved in taking out an equipment loan.

3. Resale Value of Equipment

The equipment is yours once you finish paying off the loan. But what happens if your business tanks? You can sell your commercial equipment at the resale value or put it up for lease. Either way, you still make some profit from the equipment.

Make sure you get an equipment loan from a reputable lender. Shop around for the best loan with terms that meet your goals and needs. 

Jumpstart Your Business with Probably’s Equipment Financing & Equipment Loans

Probably gives small businesses the financial support they need through startup loans and equipment financing options. We offer quick business loans and alternative business funding solutions, giving you the money you need for equipment, payroll, new developments, marketing, expansions, and more.

Contact us today and let’s talk about your small business funding.

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Startup Business Loans Without Collateral: Take Your Pick

Startup Business Loans on a laptop

Borrowing money is a sensitive matter, especially for banks that will always look for a guarantee that borrowers will repay them, plus interest. Without that guarantee, banks have little reason to grant a loan if they consider a borrower as a high risk.

Unfortunately, “high risk” is a stigma attached to startups; it doesn’t help that the statistics seem to agree with it, too:

Here’s the rub: most startups have little capital and no valuable asset to put up as collateral, and yet, they are the ones most in need of financing.

The Non-Traditional Route: Unsecured Business Loans for Startups

If you own a startup that needs an influx of cash, but you don’t have anything of value to offer as collateral, you can forget asking for a loan at a bank. Your best bet would be to apply at private lending institutions that provide startup business loans with no collateral. There might be compromises, like interest rates that are slightly higher than bank loans. But the payoff is getting the cash you need to keep the business running now so you can implement those plans to increase your revenues.

What are your options for unsecured loans for startup businesses? Take your pick from the following:

1. Working Capital Loans

These loans are meant to sustain a business’s daily operations by providing much-needed cash flow that owners can use to pay off working capital costs and operating expenses. Examples of these are inventory acquisitions, taxes, payroll, overhead, and accounts payables.

2. Financing for Equipment Leasing

Leasing agreements don’t need collateral. This is a sound alternative to financing for buying brand-new equipment: the loan and interest are much more affordable and the terms more flexible. There will be less pressure for the startup business to perform exceptionally high on year one because there are no absurdly high fixed dues to pay each month.

3. Merchant Cash Advance

You may qualify for a merchant cash advance if a large chunk of your revenues come from credit card sales. This loan is essentially an advance on the income you expect to get. There’s no need to repay or offer anything for collateral, too, because the lender will automatically deduct the payments (a specified percentage) from your future earnings. 

What if your startup hasn’t been in business long enough to have substantial historical data on monthly revenues? You may not qualify for a merchant cash advance, but you can certainly apply for a working capital loan. Moreover, if your need is specific to equipment upgrades, you can take the strategic route and seek financing for equipment leasing instead of the two other options.

Enjoy Collateral-Free Loans from Probably

All of the loans discussed above are available at Probably. We specialize in affordable financing solutions for small businesses and startups. Choose from the options above if you have no assets for collateral. If you have further questions, contact us through phone or email.