Construction Equipment Financing With Alternative Business Lenders

Ezra Cabrera

Updated: October 18, 2018
How to finance my construction company?

Despite having the desire to move forward on potential projects with large equipment demands, numerous construction business owners experience cash flow shortfalls. Fortunately, alternative business lending programs for equipment financing help business owners acquire the capital they need, giving them the leverage they need in order to make quality decisions.

Why construction companies need equipment financing

Even owners who have been in the business for an extended period of time experience hard times every now and then. In fact, the larger and more involved a construction project, is, the greater the probability that a mishap will occur. Invoices that don’t get paid, equipment repairs, city permits and building code surprises can substantially increase project costs.

Inconveniences of all sorts can and do consume cash reserves that can leave you on the outside looking in, especially when the perfect opportunity for a new lucrative project presents itself.

Applying for a working capital loan for operations tends to be a complicated process. Taking advantage of reasonable terms and the ease of submitting a loan application for equipment financing, helps a business prevent the dipping into of their cash reserves.

What is equipment financing?

If a construction company requires new, used, or leased equipment, they have the choice of using available cash or turning to an equipment financing program. This type of loan generally amortizes over a 12 to 60 month period. The good news is, it can be used for both the acquisition of construction equipment, and or things such as phone systems, computers, and vehicles. Keep in mind that the type of equipment you need may have an impact on the terms of your financing. This is because some equipment, such as phones and computers, depreciate faster than other types of equipment like front loaders for example. 

What is the equipment financing application process?

The application for equipment financing from a lender such as SMB Compass, operate differently than traditional lenders. It takes just a few minutes to provide the information needed to show your business has more revenue coming in than expenses going out. That’s the “big picture” view a quality alternative lender takes to offer you loan programs that will fit your business. So high credit scores, collateral, week and month-long application processes, and upfront fees don’t have to be a part of the equation. Neither do unmanageable repayment terms. In fact, none of these issues (below) means “No” is automatically the answer:

  • Bankruptcy
  • Tax liens
  • Judgments
  • Debt problems
  • Low or no credit history

Lenders decide the terms for equipment financing based on several factors. These can include the business credit, the history of the business, the accounts receivables, bank statements, and the type of equipment needed.

Why Do Alternative Business Lenders Exist for Equipment Financing?

Making an application with a traditional bank lender is a complicated process. You can expect to have to turn over a lot of paperwork, have your credit analyzed with a fine-toothed comb, and also provide collateral. If you don’t want to go that route, maybe you could turn to your customers and ask them to change payment terms or increase deposits, neither of which makes you look good as a legitimate business owner.

Alternative funding companies fill the gaps. They still believe in the little guy and know that just because a business has a few dents and dings, there can always still be the potential for prosperity. There might be a certain niche in the market that your business is primed to fill. There could be disaster recovery projects in your area with not enough contractors to fulfill the need. Whatever the reason, these types of lenders know how to partner with a business and get their credit back on track. All while providing much needed funds throughout the process.

Now is the Time to Move Your Construction Business Forward

Start building your portfolio and establish a lending record with the experts at SMB Compass today. We provide a variety of loan programs designed to meet the needs of construction companies.

Visit SMB Compass today and get the funds you deserve and your business needs. In fact, why not make it the very next thing you do?

Ezra Cabrera
Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.

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