You need the right equipment to run your business efficiently, generate income and keep up with customer demand.
Of course most businesses would like to have brand new equipment. New equipment doesn’t have any miles on the clock, you can reasonably expect what its total lifespan will be and you have the security of its new equipment warranty. But buying new is not always an option due to the higher costs involved, especially for businesses which don’t have the capital to expend. Or you may be in a situation where new equipment would be overpriced for the job it has to do – the income it produces may not justify its purchase price.
The lower cost of used equipment could mean you are able to buy more equipment for the same price as a single item of new equipment. And there is usually little or no lead time to receive used equipment, whereas the estimated delivery date of new equipment can often be in the distant future.
Weighing up the costs and benefits of buying used equipment may be tricky. But, how should finance come into it?
Is it difficult to get a loan for pre-owned eqiupment?
It’s not necessarily more difficult to get equipment financing even if it has been pre-owned. There are many lenders that provide used equipment finance and it can generally be financed in a similar way to new equipment. Low doc and no doc loans are also available, and many lenders will even provide finance to purchase used equipment from a private seller.
The terms for financing used equipment are usually not substantially different to new equipment. However finance providers may require the amount financed (gearing) for used equipment to be lower than with new equipment. The term of the loan may also need to be shorter depending on the equipment, its age and the lender.
Used equipment can be a good choice for many businesses requiring lower capital outlay and repayments, it can allow you to buy more equipment for the same price and it’s usually ready to go when you inspect it. If you’re thinking used equipment may work for your business, the good news it that many lenders understand and are ready to provide finance for your next used equipment purchase.