Cranes hold a powerful symbol of development and growth. However, the cost to own these can be quite steep if you are not prepared financially. With a commercial loan, you can catapult your business to the next level and find financing that is tailor-made to help you grow and develop your business. Here are a few things you should keep an eye out for when taking out a commercial loan to finance your next crane.
What are the requirements?
When it comes to finding a loan that fits with the type of equipment you want it is essential that you know and prepare to meet the eligibility criteria to avoid having your application rejected. This means checking that your credit score and your credit report are in order. Each lender has their own criteria when it comes to what types of cranes their will finance. Some are willing to finance new and used cranes, but some lenders are only willing to provide financing for particular brands.
Will you be able to get a pre-approved loan?
Getting a pre-approved loan comes with a range of benefits that can smoothen the process of purchasing and upgrading your crane. It can also help you establish what will be in your financial reach so that you do not bit off more than you can chew. Finding the right crane that is in good shape to help boost your businesses productivity takes time but having the finances in place for when you do find it will be the best thing that you could do.
Does your finance option allow you to own the equipment?
There are various finance options that come at an affordable rate to help you make purchasing a crane easier. However, not all finance options will let you own the equipment outright. This can affect potential tax benefits that you can claim on.
For example, if you choose to get a crane on commercial hire purchase the equipment you will make repayments for the period in which you make use of it, but you do not have any ownership over it. If you are looking for a finance option that will allow you to make monthly payments that will eventually lead you to owning the equipment, then you could consider leasing your crane.
Speaking to a financial advisor can help you understand the options that are available to you and which one will help you when it comes to ownership.
Will your finance option allow for constant upgrades?
When it comes to the construction industry, having equipment that is in good shape to increase productivity is vital. However, being able to maintain your machinery by purchasing a new crane can be costly. Checking to see if your loan comes with a feature that allows you to upgrade your equipment every 3 to 5 years to prevent it from becoming obsolete is essential. You will need to weigh the cost of choosing such an option and whether it will be viable for your business.
Will you be able to meet your repayments?
A lot of people are fixated on the interest rate and they are justified to as this will affect how you pay off your loan. But it also pays to look beyond the interest rate and reading the fine print on whether you will have flexibility in terms of how you pay your loan.
Finding a finance option that works with your business’s cash flow is vital. Check to see if you will have the option of making payments weekly, fortnightly, or monthly. Also, see if your loan will not come with penalty fees should you decide to pay out your loan early.