Leasing or Owning Business Equipment: Know the Difference Between Two

Any business is a big challenge. While starting a business, a lot of processes are involved. Whether it is a product or service-based business, arranging necessary equipment is a vital part. Smooth operation of a venture is dependent primarily on the equipment along with the basic process. In individual business, the requirement of tools is different. For example, a bakery shop requires utensils and apparatus related to baking and keeping the items in good condition. However, a bookstore will require entirely different apparatus and equipment for safekeeping of the books and related items. In each case, the items are as important as the apparatus or tools that are immensely necessary for operating the venture. Even after the initial stage is over, a business might require the equipment while upgrading, repairing or replacing the old ones. However, for arranging the equipment either initially or during up-gradation, you need some financial assistance. Right financing options can get you the things that you need for your business. However, there are two options, one is the financing of equipment and the other one is leasing.

What are equipment financing and leasing?  

For the purchase of equipment, you need financial support, either from your own or from anywhere else. When you need external financial support for purchasing equipment, taking loans for the same can be an option. Equipment financing is something that is designed especially for the purchase of types of equipment, required in business. You need to repay the debt over time and once the debt is completely repaid, the equipment will be your assets. In some cases, the equipment acts as the collateral itself and if by any chance you default, the lender owns the items. Sometimes, the lender imposes a personal guarantee or blanket lien.

In case of leasing, you can take the business equipment for lease. You need to pay a certain amount for the same, but there is no chance of losing an asset. Paying the rent for equipment on monthly basis is enough to help you for using those without purchasing or personal guarantee.

Difference between leasing and owning

In leasing, you do not have to worry about clearing any debts, but only to pay the lease rent. At the end of the lease, you can either renew it or can buy the same. While you want to own the equipment through a loan, you need to make down payment as well as to pay monthly interest for the loan. However, in case of leasing, no down payment is necessary. No collateral, personal guarantee or lien is necessary in case of leasing. Taking equipment on the lease is beneficial than financing in terms of getting approval. Getting a business loan or an equipment loan needs approval from the financial institutions, whereas getting a lease is much easier to qualify for the approval. However, for long-term, leasing is not a good option in terms of costs. Monthly rent in case of leasing is more compared in long-term and you may end up paying more in leasing equipment than in taking loans for that.

However, it all depends on your business and the type of tools or equipment you need as well as your financial condition that you should take a loan or lease it.

How to Stay On Top In Today’s Small Business Competition

With more small businesses rising every single day, it is resulting in facing a tremendous competition. After the economic crash took place in 2008, the entire workforce has gone through immense changes. These days’ people are leaving their traditions jobs and are focusing on offering products and services in order to reach their dreams. This has led to facing an unimaginable competition not for the established companies but especially for the budding agencies.

If you have recently stepped into such a situation, you will definitely understand the plight of others, but don’t let loose. Competition is a part of any healthy economy and the only key to go across then is walking on the right track.

Keep it Same But Keep It Intriguing:

Well, the entire business realm in intimidating and so as the competition. If you are thinking to reinvent services or products, most of the chances are that you will end up being frustrated. Instead, make sure that you choose something within the industry but something that no one has done yet. Just for an instance, Starbucks is not only known for selling coffee, but also they sell personalized beverage service. This is something that not everyone offers and which is why Starbucks is the real deal today.

Focus On Your Customers:

The real thing that keeps small business growing and succeeds is they focus more on their customers. Business owners understand the need for focusing on their customer and how important it is to respond to their queries and grievance. By following such a pattern, business helps themselves to rise within their limited budget but dream big even in such a competitive marketplace.

Keeping Yourself Engaged With The Competitors:

Most of the people assume that competition is bad and as result competitors are enemy. The real thing is, business rise when you are keeping a track on your competitors move or a healthy competition amongst each other. Even when you are tight in your budget but your competitor is not, always try to focus on what they are doing. These days with the Working Capital Loans available with the Bottom Line Bankers, no more you have to restrain yourself from offering something new in the market. You can walk hand in hand with the competitors, and if your product or service has something innovative, you will be liked by all.

Take Risks:

You definitely need to take risks when it is about your business. Often some of the tiniest risks can lead to better and bigger business that can make you a global icon. It is always advised to initiate with small changes and then jump on the more significant changes. With every tiny step, you will understand if it is actually working in the market or not. As per the result acquired, you can then take the next big step.

In today’s competition, it is always a great thing to put the right step forward. These are some of the simplest ways to rise higher in the competition. Since it is always a need for securing the funds, opting for small business funding options can be a great deal.

So let go of your dreams, just take the hold and rule.

Debt Consolidation Loans: Make The Right Decision

When it is about starting your own business, you definitely need to think about securing your finance. Well, very often we get to hear about the term “Debt consolidation loan” which is said to be a great way to stay away from debt. There is no doubt that it is a great idea when it is being used only when there is right financial and debt situation. Prior to choosing anyone from the range of debt relief choices available in the market, you require comprehending the financial position. Unless you have complete knowledge about it, you might end up making a wrong decision resulting in wasting your money.

You can definitely get in-depth knowledge about from the bankers, but before that, you require knowing the many reasons. Let us take a look at the reason which makes debt consolidation a great idea.

Three Reasons That Makes Debt Consolidation A Great Choice:

When you have set your heart on making use of debt consolidation loan in order to get rid of debt, you require taking into consideration the different factors. You definitely need to focus on the three significant factors before making any decision of applying it.

It is a great idea when

  • You need to reduce the high-interest debt rates:

When lowering the interest rate gets impossible, it is not an excellent choice to consolidate. Why will you spend more to simplify your debts? Even when it says to ease the payment terms but you are paying high interest rates, you definitely need to start reconsidering. Make sure you always opt for the lowest prices.

The simple thing is you can get a low rate of interest only when you have an excellent credit score. If by any chance you do not have a decent score, you should focus on improving credit score.

  • When you are done with juggling many credit accounts:

This is again taken into consideration when you want to simplify the monthly payments. From the time you make use of one loan for paying your debts, it becomes much easier to meet the payment needs. No longer you need to worry regarding keeping track of debt amount and due debts.

  • When you have to improve the repayment terms:

Finally, you got something that is focusing on enhancing the repayment terms. This is said to be the best way to do it. You can find loans that have great terms like longer or shorter repayment plan. Moreover, you can again look into the charges and fees that the original lender has given to you. Once you get a lender who offers better terms and can be a great help when it comes to paying off the debts, you can definitely take a step ahead.

Things you require for making debt consolidation work:

  • High credit score
  • Self-discipline
  • Stable income source

Well, these are some of the scenarios where debt consolidation tends to be the right choice for you. All you need is to get hold of a partner who can give complete knowledge and then jump for it. Now you can talk to the experts of Bottom Line Bankers and get fast approval loans to start your new business.

So don’t wait and opt for it.

Get Loan for Your Startup: 5 Smart Tips You Need To Check

When it is about starting your own business, beyond just thinking about its chances of rising in the market, they are much stressed about ways to get the finance ready for the business. There is a big dilemma of whether to opt for loan or finding other way out.

Since there are plenty of funding options for startups, there is a need for choosing precisely as it is nowhere like one-size-fits-all-answer. In order to remain assured about finding the right loan, check these few tips that will ensure fast approval loans.

 How much do you need for your startup?

This is the prime thing to consider. You will find many lenders who will work depending on how much you need. Suppose you find a traditional lender who can lend $5000 for your startup. Even when this is not an issue to them, this can be a major issue for parents. In such a scenario, microloan can be a great choice. This is because here you can borrow huge amount still have limited credit history.

In order to get ideas about the loan amount, check your business plan. You can get a clear estimation and then take steps according that.

How Quickly You Need The Loan Funds?

There are loans which are designed as installment loans for example car loans or mortgage. It means as soon as the loan gets approved, you can receive funds. There is no doubt that you can pay monthly basis including interest rate charges and fees.

Moreover, there are again other loans that make use of lines of credit. For this case, you will not issue any predetermined amount. Even when there is a limit set, you can choose the amount you need for your startup.

If $10,000 is an immediate need, installment loan is a great option. If $50,000 is the amount you need to start with, revolving credit can be a great choice.

Where will be the loan used?

The primary deciding factor that helps lender make the decision is on what you will spend the amount. For an instance, business line of credit is generally used by the businesses that require cash to make payroll, equipment purchase or other marketing campaigns.

Finding out for what you require the amount will always help investors get clear picture and help get the finance ready.

Since how many years are you into business?

If you are in the early stages, it can be difficult for you to secure loan from any traditional lenders as they check your credit history, business plan, collateral, cash flow projections and much more.

In such scenario, small business loans from any alternative lender can be a great choice to secure finance for your startup.

Get Rid of bad Debt:

If you are conducting your business as the sole proprietorship, personal credit has a great impact. To be more precise, all you need is to check the personal credit score by eliminating debt or making on-time payments. This will increase the chances of getting the loan approval.

When it is about starting your own business, you need to secure your finance and which require putting the right step forward. Prior to getting enlisted into the world of debt, consider understanding the above-mentioned tips. At the end, the less you give, the more you can invest.

The Pros and Cons of Commercial Loans

While starting a business, an entrepreneur needs to consider two points, whether the business idea is viable and whether the project is feasible or not in terms of everything. Provided all other factors to remain favourable for starting the business, funding for the same might be a cause for worry. Starting with your own funds for the business might be quite challenging and not feasible in most of the cases. At this juncture, you have to consider with external funding. With external funding, most of us think about commercial loans from banks and private lending institutions. Other options for managing funds are there, but mostly, the above options are considered to be the most common in practice. Other funding options like Fast Approval Loans and Merchant Cash Advance are there, but take care before going for anyone. However, there are several advantages and disadvantages of these loans and being an entrepreneur; you have to go through them before starting up.

Pros associated with commercial loans:

  • This type of loan has a low rate of interest compared than other ways of business funding.
  • Commercial lenders are entitled to debt repayment only and not to profits of your business.
  • Interest payments on business loans can be deductible on the taxes paid and are very much advantageous.
  • Commercial loans offer several key incentives to entrepreneurs.
  • Loans of this type are usually of long-term and can range from 3 to 10 years so that entrepreneurs can repay the debt slowly without hampering the business process.
  • It covers bulk start-up cost as large sums can be taken as one single loan.
  • You can have the entire ownership of your company whereas, in most of the other types of loans, a fraction of ownership or the total profit is owned by the lender.
  • Commercial lenders have no interest in how you manage the funds you get a loan; rather they will only review your business plan detailing the potential use of such funds.

Cons associated with commercial loans:

  • Detailed information about the business structure, clear project description with every single area to be covered, information about potential investors, profit and cost predictions. A good credit rating is also a vital factor, lacking that might end in rejection of loan.
  • Business loans from financial institutions are dependent upon government policies and whims of the market. Rates fluctuate and are usually high in the first place and increase on borrowing more.
  • A larger amount of loans often require detailed accounts of the way money or loan will be spent.
  • Usually, you need collateral like any fixed asset like home, land, car, etc. as a security deposit to qualify the bank loans. Also, if you are unable to repay the debt from your business, the bank retains the right to seize the asset that has been used as collateral.
  • Usually, a commercial bank loan appears to be on the side of liability of the business balance sheet and so it affects the valuation of a business.
  • It does not guarantee profit and growth of your business.

Apart from all the points mentioned above as pros and cons, you might find some more, when you actually enter the business after taking the business loan. Whatever, the list might be, you will always find it advantageous to get a commercial loan from a financial institution over other types of funding.

Ways To Ease A Successful Business Loan Application

Financial stability is the prime requisite of small business owners and the only way is by opting for business loans. Undoubtedly taking the decision of starting your venture in today’s competitive era is a matter of concern, but more than that applying for a small business loan seems hectic. Since the application procedure takes time, today we will focus on how to get prepared for the application process which will help to obtain the capital for your business.

When you are ready with everything, the lenders understand that you are a trusted borrower and will definitely pay the loan back on time. So if this is the first time you are applying for a loan but don’t know to make smoothly and quickly, here is a chance for you to understand its requirements.

So what do you need to do?

Keep All Your Documents In Sync:

There is often a need to maintain transparency of financial state when it is about your business. Keeping tax and accounting and financial records accurate and up-to-date is a need to make the entire process smooth. Also ensure that your businesses have everything organized.

When the accountant has everything in hand and nothing to question about, they remain assured they you are a trustworthy person. So make sure all the documents are kept properly in synchronization.

Which type of loans does your business need?

The primary thing that you need is to comprehend the loan type that will suit the best for your business. You can apply for scrutinized loan such as Small Business Administration loan when you require line of credit can slow the procedure and out an end to the denial.

There are various types of loans available for small businesses and therefore choosing becomes a vital choice. You can have a word with the experts of Bottom Line Bankers before you opt for Working Capital Loans.

Make Sure You Have Good Credit:

Definitely keeping a track of the business documents is a need but more than that, you can make sure that you pay the bills on time. Meeting the credit criteria is a need to get the best options. Make sure you avoid charge-offs, late payments, foreclosures and bankruptcies. Since banks primarily check the credit score to understand whether you are reliable or not, maintaining good credit is the primary step of the procedure.

Demonstrate Adequate Cash Flow:

When you have existing business, the first thing banks will check is that you have proper described cash flow in order to make month payments of the loan. The entire analyze is done by checking the past tax returns along with the existing debt. This is the reason why you need make sure that you pay your tax returns on time.

When it is about applying for small business loans, it is always a need to keep in mind about the a few things. If you are new to this market and are not aware of the easiest way to get the Small Business Online Application procedure done, you can follow the above mentioned information.