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Equipment funding is capital you use to lease or buy equipment for your business. Equipment funding is available from many different sources and can be designed to fit the unique needs of your company.
You may be able to fund equipment through your company’s sales revenues. This can be an ideal way to fund an equipment lease. With a lease, property is not owned, which may be a better option for small businesses that don’t have the money to purchase and maintain equipment. Equipment can be updated through a lease program as well, helping your company maintain a workflow on par with industry standards. You might find, however, that sales revenues are not the best way to fund an equipment purchase. If cash reserves are low, and you need money to maintain your business operations, it may be better to seek a loan. The purchased equipment acts as its own collateral and is not fully owned until the loan is repaid in full. Another source for equipment funding is through alternative funding channels, such as credit card receivable funding. In this scenario, you use funding through an alternative provider to purchase or lease your equipment.
Many small business owners prefer alternative funding methods for equipment finance, because it preserves their cash reserves.