10 17 2016

10 17 2016

The Advantages of Using Working Capital Loans to Buy Equipment

Having enough working capital to purchase the equipment necessary to successfully compete in your industry is a must for any and every small business. Without this crucial equipment, you may find your small business lagging behind its peers in the market, unable to respond to industry disruptions and quick to lose its customer base. Once your company starts to fall behind the general pace of competition, whether because of a lack of technological upgrades or an inability to pivot to newer machinery, it can be difficult if not impossible to catch up.

Unfortunately, one of the main reasons for owners not buying the most updated equipment or newest technology on the market isn’t because they don’t want to do it, but because they simply don’t have sufficient working capital to make the purchase. Not enough having money to make these acquisitions isn’t just a problem in and of itself, but it can lead to a perpetual downward spiral. The lack of funding means you can’t purchase the equipment you need, which means you end up losing market share to competitors causing sales to slump, all of which can put a dent in the working capital, meaning the purchases are pushed further and further into the future. It can be vicious cycle.

Thankfully, obtaining a working capital loan can be the perfect option for purchasing the equipment necessary to truly take your small business to the next level. There’s a number of advantages to using a working capital loan to buy equipment, such as:

Prepare your business for the unexpected

Having sufficient working capital is paramount for positioning your company to not only compete in a crowded market, but also to be prepared for handling any unexpected turn of events that is not only possibly, but likely, to happen. Equipment is notorious for breaking down or malfunctioning, which can lead to significant downtime. New threats and risks arise every day too. Companies that utilize computers leave themselves vulnerable to viruses and malware that could potentially shut down the entire network.

Having quick and easy access to working capital can provide the funding needed to swap out a sputtering wreck of equipment with a well-oiled machine or replace a swath of computers following a hack or cyber breach.

Sole equipment ownership

One of the ways some small business owners bridge funding deficits is by taking on outside investors, typically private equity firms. While this can provide a capital injection in the company, it also means owners need to relinquish a substantial portion of the ownership to the investors.

Instead of handing over a chunk of your business to outside parties to cover the cost of buying new equipment, a working capital loan lets you retain full ownership of your small business. Other than making the regular payments on time, there are no other obligations or relinquishment ownership.

Collateral isn’t always necessary

Working capital loans can be either secured or unsecured, with many falling under the latter category. An unsecured working capital loan does not require you to put down any collateral to receive funding. Typically businesses with a stellar good credit history and or little to no risk of defaulting will be strong candidates for an unsecured working capital loan. However, even businesses with poor credit history are still eligible for a working capital loan from an alternative lender.

Working capital for all industries

Whether you operate a retail store that needs to purchase new point-of-sale equipment or you run a construction company that has to replace antiquated machinery, a working capital loan is the quick and easy solution you need. Every industry has its own unique obstacles that need to be overcome and requirements that need to be met to find success. And no matter which industry you operate in, chances are you’ll need to have the best equipment possible to remain competitive.

Landscaping companies need lawn mowers, weed whackers and bush trimmers. Farmers need to utilize machinery to plant and harvest their fields, while offices need to have computers, software and other equipment necessary for daily operations like phone systems and copy machines. The cost to buy all of this equipment can be prohibitive for companies that don’t have the necessary working capital.

Quick and flexible application process

Aside from the actual cash injection, perhaps the best part of a working capital loan from an alternative lender is that they’re quick and easy to obtain. With approvals in as quickly as 24 hours, you can obtain a working capital loan overnight. By providing access to this important funding channel without delay, you can get to work on buying the equipment necessary to compete in the business of tomorrow.

Additionally, financing for working capital loans is typically flexible, with interest rates and repayment terms tailored to the needs and capabilities of your small business. Lenders will work with your business to find the best repayment schedule so that terms are not too onerous and payments are not cutting in the budget, both of which would defeat the entire purpose of obtaining a working capital loan.

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Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121.  Funding amount and credit approval is subject to a full credit profile review.