Financing equipment or paying cash?
Paying cash takes the sum out of the account at once; financing spreads the purchase over a term, at a cost the lender sets in its written offer. Choosing to finance is yours; deciding to lend is the lender’s.
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- What is the difference between financing equipment and paying cash?
- Paying cash, the business pays the price once and has no payment afterwards. With financing, the sum stays in its account and it repays in instalments, with interest and fees written in the lender’s offer.
- When does one route or the other come up?
- Cash comes up when the business has the sum and can do without it for its running expenses. Financing comes up when that sum has to stay available for working capital, or when it is not there.
- What does each route ask of the business?
- Paying cash asks for liquidity that is still sufficient once the equipment is paid. Financing asks for a file: the supplier’s quote, your business bank statements and, often, a down payment set by the lender.
- Financing or paying cash: which route for my business?
- It depends on your liquidity once the equipment is paid, and on the payment your revenue can carry. The total cost of financing is written in the lender’s offer, which you are free to refuse.
What the lender looks at
- Actual deposits, month by month
- The payment on financed equipment is compared with what the business takes in.
- Trend over the period
- The lender looks at whether revenue rises, holds or falls before the purchase.
- Days in overdraft
- An account often below zero leaves little room for a new payment.
- Payments to other lenders
- Equipment already financed elsewhere counts as a commitment.
$0 upfront · 7% only if funded
An intermediary, not a lender.
The lender sets the final amount and its cost in its written offer.
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