If you don't have the money to pay for heavy equipment at the upcoming equipment auction, you can find a company that provides heavy equipment financing. Here are some of the most important things to know if you're taking out a loan to pay for machinery at heavy equipment auctions:
1. Always understand the terms of the loan
Not only do you need to look at the interest rate, but you need to make sure that you know if the loan you get is an adjustable or fixed-rate loan. Adjustable-rate loans feature interest rates that can go up or down, but the interest rate of a fixed-rate loan will not change. This means that the monthly payments on a fixed-rate loan will stay the same over time, but the monthly payments for an adjustable-rate loan can increase or decrease
2. Make sure that the monthly payments fit into your budget
If you're at an auction, it's easy to get caught up in the moment and spend more than you should. Make sure that you do not make any offer that could be a questionable move for your business.
3. Compare the interest rates of multiple lenders
You don't have to sign on to the first loan that you find. Make sure that you compare rates between as many banks as you can. In fact, it may be possible to get a better rate on a loan from a local credit union or a small bank.
4. Know the difference between a hard and soft credit check
A hard credit check will result in a small decrease in your credit score, but a soft credit check won't. Most lenders will do a soft credit check, but make sure that you check with each lender that you consider for your business loan.
Common equipment financing myths
If you are planning to attend upcoming equipment auctions you might have heard some myths about financing! Here is what you should stop believing now:
Financing costs too much money
Leasing is for specific equipment only
I can’t get the new model if I finance
Financing will not provide capital
When you lease or finance equipment it can save your business money by offering many tax breaks! Any type of equipment can be financed as long as you work it out with your lender. If you enjoy getting new equipment, you are able to finance new equipment without monthly payment increases. Through financing, you may be able to get 100 percent of capital to buy new equipment.
Before you go to any upcoming equipment auctions remember to do your research and not believe everything you read online. Just like how you want to compare interest rates with lenders, you should research certain topics before coming to a conclusion about heavy equipment financing.
Lyon Auction makes its process headache-free for both the buyer and seller. Contact us today for more information!