Unless your business has an overwhelming amount of money on hand, it can be difficult to secure any type of financing deal for a new piece of equipment. But as long as you're persistent and do the right things beforehand, you'll eventually be able to accomplish your goal of buying a critical excavator, crane, or whatever else you need for your construction business at a good loan rate. If you're not sure where to begin, you can start by utilizing these three possible ways you can secure a better financing deal for a new piece of construction equipment.
Build A Garage Or Shed Big Enough To Hold The Equipment
The more protection the construction equipment has from the elements and from burglars, the lower the insurance premiums on it will be. And the lower your insurance premiums are, the more cash you'll have on hand for potentially paying the loan on the equipment, lessening the risk for the bank.
Especially if the construction equipment you need is a machine like a small cement mixer instead of a vehicle, building shelter doesn't have to be prohibitively expensive. With a few tools and materials from a hardware store, you should be able to build an adequate shelter in just a couple of days. If you have plenty of employees to help you, the job will be even quicker.
Start A Permanent Fund For Repairing Equipment Breakdowns
Every month, set aside some of your profits in a special account, instead of taking everything out to spend on yourself. Once this account is large enough, you'll be able to point to it when your bank asks you whether you'll have cash on-hand for sudden equipment maintenance issues.
While you might be able to get away with just having a business credit card for this purpose, you'll probably be forced to accept a much higher loan rate. When you combine the interest of a loan with the interest from a credit card if a massive breakdown happens, saving a bit of money really seems like a prudent thing to do.
Carefully Record All The Times You Rent Small Equipment
The more examples you have of renting small pieces of equipment like drills and specialized ladders from other businesses for a short amount of time, the more likely it is that a bank will trust you with a large amount of money. This is especially true if the papers you send the bank indicate that you regularly rent equipment from a large variety of businesses instead of just one or two.
Contact a company like Westar Financial Inc for more help.