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

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!

What Alternatives Are There to SBA Financing?

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.


Flattening the Curve of Cash Flow Gaps After COVID-19

Today, business owners face plenty of rough patches due to the COVID-19 pandemic. Self-isolation measures, social distancing rules, and travel restrictions have resulted in the suspension of operations and substantial declines in sales.

In the face of a pandemic, business owners now struggle with cash flow gaps. The closure of brick-and-mortar-stores, failure to fulfill customer orders and collapsing supply chains cause incoming cash to plummet, which could result in a negative cash flow. Because of this, many business owners are creating strategies, applying for a merchant cash advance (despite their bad credit) or downsizing the workforce to weather the current consequences and potential aftermath of the pandemic.

Understanding the Immediate Problem

Drops in sales cause the cash wheel (a tool that generates that required liquidity to operate a business) to slow down or stop. When sales continue to drop, the cash flow dries up. If you cannot stop the drop, cash outflows (payments for raw materials, salaries or supplies, merchandise, interest, and rent), cash reserves, and other lines of credit will be used up, resulting in a cash-flow gap.

The Reality of Sales

No cost, no sales — this is a reality business owners face. Retailers need to buy products or invest in services they can sell. The inverse of “no cost, no sales” (no cost without sales) is not always true for two reasons: time delays and a fixed cost.

In terms of costs, there are two types: fixed and variable. When sales drop, the variable cost drops too since lower sales volumes require fewer labor and materials — therefore, fewer payments. On the other hand, fixed costs remain in place and are more difficult to change. For example, you still have to pay rent even if your store is slow or has shortened hours, or even closed for weeks at a time!

Plus, variable costs do not disappear. As a result, business owners experience a rapid and sharp decline in their sales. Payments never stop when sales stop, which emphasizes the need for immediate action to prevent cash flow gaps.

How to Beat Cash Flow Gaps

Reduce Costs as Much as Possible

Assess your finances for the time being and consider reducing costs in non-essential areas. Start by listing your variable and fixed costs to start cuts. Depending on your current business model, ask yourself the following questions:

  • Can you temporarily cut the staff’s commission and offer a different incentive?
  • Are there alternate and more affordable ways to ship your products?

Also, consider how you can change fixed costs into variable ones. For example, consider cutting computer and maintenance costs to save more.

Prioritize Generating Cash Over Turning Profit

Profit doesn’t always equate to positive cash flow. What you need is money right now, so speed plays a factor as well.

If you have already tackled cash flow strengthening tasks (e.g. cutting variable costs), it’s easy to adjust your profit-generating actions toward cash-generating goals. Consider the follow cash-generating strategies:

  • Repackaging services or products for a consumer market. Many products reach consumers via a middleman or sold to businesses with office spaces. Encourage marketers to unleash their rebranding creativity and create a simple landing page to get your products in front of customers.
  • Offer exclusive discounts to customers. Acquiring new customers is more expensive than keeping the ones you have. Keep in mind that your current customers are bursting with pent-up demand. If you offer the right discounts with a compelling ‘exclusive’ message, you can boost sales and generate immediate cash.

Probably Wants to Help Your Business Not Only Survive – but Thrive!

The pandemic may have challenged the financial stability of your business, but there is no storm you can’t weather. Proper planning, budgeting, and strategizing can keep your business afloat until the time it’s “business as usual” again.

If you need assistance with your finances, Probably Yes is at your service. Call us today to learn more about our small business loans.


Our Small Business Financing Options

Probably works hard to help small businesses finance their operations, expansions, and success! We offer a wide array of small business financing options – but our three most popular are our working capital loans, merchant cash advances, and equipment financing.

Let’s look into each so that you can feel confident in your small business financing choice! Of course, if you still have questions, reach out to our knowledgeable team to learn which of our small business financing options is the right fit for you.

Working Capital Loans

A working capital loan is a loan for your small business’ everyday operations. That means these loans have shorter terms and are not used as prolonged investment funding. Think of these loans as ‘bridge loans’ to help you bridge the gap between paydays, large orders, or an influx of working capital.

Working capital loans are often used for payroll, equipment, taxes, marketing, rent, or debt payments when your business’ next payday is still a few days away. Seasonal businesses might need working capital loans to bridge the gaps when they are prepping for their busy seasons.

All small businesses have slow and busy periods, but that doesn’t mean your bills won’t continue to pile up. Use a working capital loan to help with your cash flow at any time of the month or year.

Merchant Cash Advances

A merchant cash advance (MCA) isn’t a loan but a cash advance based on your business’ credit card sales. You can apply for a merchant cash advance and have your funds deposited into your business checking account quickly, making it an excellent option for fast funding.

Our merchant cash advance looks at your daily credit card receivables more than your business or personal credit to determine approval. This means even a small business with lower credit scores or a new business without a long credit history can be approved.

While a merchant cash advance might make sense for a small business that needs cash quickly and doesn’t have a long (or high) credit history, it is essential to make sure you understand the term-limit, interest rates, and any holdback.

Ask your Probably agent to explain this small business financing option to you – as clarity and transparency are two of our core values!

Equipment Financing

Our equipment finance services can help your small business acquire new or used equipment without emptying your bank account. When you lease a piece of equipment, you’re essentially renting it while making payments for the duration of the lease agreement. Our equipment financing not only gives ownership of the equipment to your business but the equipment also usually serves as collateral for the loan.

We know that equipment is essential to keeping many businesses going, and if you use large equipment, or need multiples, it can tie up a large amount of your working capital or credit. Whether your business has one or several equipment needs, equipment financing is a way to have that equipment right when you need it, even if you do not have the full cash on hand.

Choose an equipment finance company that works in your industry and understands your unique needs for the best results and approval rates – like Probably! We specialize in equipment financing for small businesses in multiple industries, and we can say ‘probably yes’ to your equipment needs.

Contact Probably for the Best Small Business Financing Option for You!

Most banks won’t even consider helping smaller or newer businesses but Probably wants to work with you to help you grow regardless of your age or credit history. That’s why we offer small business financing options that can work for anyone.

We think that every business deserves the chance to get the funding they need to succeed – and we’ve made our business out of believing in them!

Contact Probably today to learn more about our small business financing options and how they can work for you.