Six Mistakes To Avoid When You Need To Have Excavation Equipment Financed For Your Company
Having an excavation equipment purchase financed for your company could be a great way to update your technology and take advantage of business opportunities. However, it's important to plan out your purchase and financing carefully.
The following are six mistakes to avoid when you need to have excavation equipment financed for your company.
Choosing a loan term length that exceeds the lifespan of the excavation equipment
Excavation equipment is expensive. This means that you might be paying off your purchase for some time to come.
It's always important to plan ahead and make sure that your excavation equipment can be expected to exceed the life of the loan. You don't want to be continuing to make payments on equipment that you can no longer use.
Failing to prepare a solid business plan for your equipment purchase
Taking the time to set out a business plan for your excavation equipment purchase isn't just important for planning out the purchase. It can also be important for securing financing.
A lot of lenders will want to see a detailed business plan. Lenders want to make sure that your company is both in good financial standing and properly managed. The more prepared you are to apply for financing with a detailed business plan, the easier it will be to get an equipment loan and the better the loan terms will be.
Not adequately considering different equipment options available
If you're purchasing a piece of heavy equipment, it's important to research the market carefully. Excavating equipment can be used for a variety of different applications including material handling, demolition, rough grading, trench excavation, mining work, and more.
You should consider the various excavation tasks your company needs to carry out and find a piece of equipment that can handle your needs.
Letting the financing process delay progress on excavation work
It takes time to find the right excavation equipment for your needs and to get financing for it. In the meantime, you don't want to get behind on any projects your company is currently working on. This could compromise your relationship with existing clients.
Try to plan your purchase out carefully to stay on schedule. If you have ongoing excavation work, you might consider renting equipment in the meantime until your excavation equipment purchase can go through.
Getting financing from the excavation equipment dealer rather than researching other options
Many heavy equipment dealers offer financing for their clients. However, you don't necessarily have to use the dealer's financing options. You should look into other financing possibilities to make sure that you're getting the best possible deal.
Discuss your need for an excavation equipment purchase with your bank to see what kind of financing options they can offer. You might find that the terms of the financing offered by the dealer are not the best that are available to your company.
Neglecting to crunch the numbers and work loan payments into your company budget
Financing excavation equipment for your company requires you to make a large investment. It's important to work out your company budget and factor loan repayment into your budget. Plan ahead to make sure that your company will still have healthy cash flow after you start repaying the loan.
Contact a company that offers excavation equipment financing services to learn more.