With equipment financing becoming more accessible to business owners, you may have considered acquiring a loan for your construction business. A construction equipment loan can help out your business in many ways. Let’s look at some of these benefits and discuss how you can make the most out of a loan if you choose to take one.
Use a Loan To Acquire Better Equipment
Construction equipment can be expensive, and facilitating the purchase of such equipment with cash can leave a significant dent in your reserves. Or maybe your current budget significantly limits your options regarding the equipment you can purchase.
Taking an equipment loan can solve these issues since you only pay a fraction of the total cost as a down payment, enabling you to afford higher quality equipment that you would not have otherwise acquired. When used effectively, high-quality equipment can generate a great return on investment that often ends up paying for itself.
This is especially true in the construction business, which relies highly on the quality of the equipment used. Good equipment can make or break your business, so utilizing a loan will often be a good decision in hindsight.
Outdated construction equipment is a safety hazard for your workers. As a business owner, you stand to be held accountable for accidents that may result from outdated machinery. Additionally, such events will damage your reputation and affect the continued success of your business.
Leveraging loans can enable you to upgrade to or acquire new equipment that is up-to-date compliant with the safety standards in your industry.
Using a Loan To Improve Your Service Quality
As previously mentioned, a construction business relies much more on the quality of the equipment used. Having better equipment will improve the quality of the service you offer your clients, increase customer trust and satisfaction, get referrals and expand your services to a wider audience overall.
Additionally, the nature of the equipment used in construction plays a significant role in the overall speed and efficiency of your construction workers’ output. Increasing productivity and saving time are achieved by using superior equipment, something that equipment financing can help you achieve.
Leveraging Construction Equipment Loans To Improve Credit History
Acquiring a construction equipment loan can positively influence your credit history, especially if your business is new. A better credit history, in turn, allows you to obtain larger loans with lower interest rates in the future.
It also increases the likelihood of you getting a favorable loan on the spot in case you need funds to seize an opportunity.
If you are looking to expand your construction business, you may find yourself taking business loans from time to time (whether for equipment or otherwise). A construction equipment loan, which is relatively straightforward to acquire with flexible payment plans, will set you off on the right foot.
Acquire Large Lines of Credit
EFFI provides exceptional equipment finance solutions for enterprise clients ranging from $500,000 to $20,000,000. We have years of experience financing construction equipment such as asphalt and concrete pavers. We also have helped companies secure lines of credit to accommodate their construction business needs.
For example, a family-owned, Utah-based paving company had an existing $2MM line of credit with a leading middle-market bank. However, the management team had grown dissatisfied with the service that they were receiving.
Additionally, the bank did not increase the size of the line alongside the company’s growth. While equipment finance is the primary focus of EFFI, we were able to facilitate a larger $3MM line of credit for the company. This will provide the company with additional liquidity during the seasonally slower winter months. Read up for more about EFFI’s funded projects in aviation and other industries as well.
As icing on the cake, you can obtain tax deductions on the loans you pay for equipment financing. This may vary slightly on a case-by-case basis, but to find out if you’re eligible for tax deductions, consult EFFI financial experts to learn more.