Business Equipment Loans: What You Need to Know

Equipment loans and equipment refinancing can be powerful tools to fuel business growth—and we can help.

Machias Savings Bank has made sure Maine businesses have the tools they need to succeed for over 150 years. From helping small businesses replace broken-down vehicles or machinery to funding cutting-edge technological investments that lead to big breakthroughs, our business lenders use business equipment loans to provide affordable, flexible, and fast funding that keeps businesses running.

Equipment loans for business are just what they sound like: funding to purchase or repair the essential tools for processing, preparing, and producing your products or services. Industrial equipment, farming and logging machinery, medical and dental equipment, computers and copiers and cash registers, printing presses, commercial ovens and grills, delivery vans, cash registers, printers, phones … if a Maine business needs it, Machias Savings Bank finds a way to make it happen.

In addition to keeping your company running and growing, business equipment loans can boost your business in other ways:

• equipment loans for business are usually a faster way to finance new and used equipment than a traditional business term loan
• business equipment loans can let you conserve your cash for other expenses
• monthly payments on equipment loans for business are often tax-deductible as a business expense
• equipment financing and refinancing offers flexible repayment terms so you can choose a repayment plan that works for your company
• a portion of funds from equipment loans and machinery loans can sometimes be used to cover “soft costs” (such as delivery and freight charges) associated with your purchase

Sit down with a Machias Savings Bank business banker, share the challenges your business faces, and let us show you how business equipment loans can help.

NOW OR LATER?

The timing of heavy equipment loans, construction equipment loans, machinery loans, and other types of equipment financing depends on many factors. Your personal business banker can help you think through some key questions to determine if now is the right time to borrow.

• Do you need to cover an essential repair?
• Is equipment breaking down so frequently repairs are no longer sustainable?
• Are there tax benefits to buying now?
• Are you falling behind your competitors because of outdated infrastructure?
• Can you take advantage of special pricing or incentives if you buy now?
• Do you have an adequate down payment and credit rating to secure the loan, or do you need more time to get your finances ready?

LEASE OR LOAN?

Your personal banker may also ask you to consider whether or not leasing (or even renting) the equipment you need might be better for your business than a new or used equipment loan.

Leasing lets you rent the equipment you need for a limited time and return it when you no longer need it. You may need to pay additional costs for damage or wear-and-tear, but for equipment that is very expensive and/or infrequently used, leasing can be an attractive option for some Maine small businesses.

If leasing is an option for the piece of machinery or equipment your business needs, you will want to do some number-crunching before committing to a small business equipment loan. Your personal banker will be happy to help you evaluate your choices!

NEW OR USED?

Many business owners assume their bank will be less enthusiastic about writing used equipment loans. But businesses buying used equipment in Maine show a certain amount of Yankee thrift that our lending officers always like to see—especially if used equipment loans make better sense for your business plan.

For instance, if expensive farming equipment such as a planter will only be used for ten days of the year, does it make sense to buy it brand-new? Additional due diligence is required for used equipment loans and your personal banker will want to make sure you are not investing in equipment that will need frequent repairs.

Ready to talk with your personal banker about equipment loans or equipment refinancing? Brush up on your business plan, research the type of equipment you want to buy, decide on a down payment you can afford, gather your cash flow statements, and make an appointment.

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