If your business depends on equipment to generate profits, you probably use it many times a day. When you first apply for equipment financing, the machinery looks so new that you probably instructed your workers to take extra care of it.
As the months and years go on, though, and scratches or dirt start to show up, it’s easy to start to take equipment for granted. Resist that temptation. Equipment maintenance is a long-term investment in your company’s financing health.
Equipment Financing Power: What Is Equity?
One of the most important reasons to keep your equipment in good repair is because it can be a valuable source of equity for financing. Equity refers to the value of business assets. When you own heavy machinery or other types of equipment, they can help you secure other loans.
For example, if you want to purchase a piece of real estate for your business one day, most banks will ask you for collateral. Heavy equipment is an excellent source of collateral that helps reduce risk and lets you qualify for better interest rates.
What do lenders use to determine how much financing you can qualify for? Generally speaking, they look at your equipment’s equity. When construction equipment has been properly maintained, looking, and working well, the machinery has a higher market value. That means you can get a larger loan and have an easier time qualifying.
Profits for Your Business
When you choose equipment financing, ongoing maintenance is stressed by the lender. This matters for protecting your investment, and it’s good for your revenue as well. Think about it: The better your equipment runs, the more money you can make with it.
Careful maintenance helps improve profits in several ways. Avoiding premature wear and tear means the machinery lasts longer. Instead of getting 10 years of service from a backhoe, you can get 25 years or more with good maintenance. Once you’ve paid off the loan, every additional year represents a huge increase in your return on investment.
The Biggest Problem with Downtime
Maintenance is especially important for the machinery that your company uses day in and day out. These vital pieces of equipment are key to your company’s services. If they break down, it doesn’t just mean you have to hire a mechanic; it means your entire work process comes grinding to a halt.
You lose money and have to pay employees to wait around until the equipment is up and running again. It’s better to maintain equipment and avoid breakdowns in the first place.
At Speed of Light Funding, we have a great reputation for helping our customers get the business loans they need as quickly as possible. We offer flexible loans that adapt to your company’s circumstances and are easy to qualify for. We’re friendly and knowledgeable, showing you the best commercial finance options for reaching your goals. With the right loan, your business can grow in amazing ways.