Equipment finance loans are specialized financial products designed to help businesses acquire the machinery and tools necessary for their operations. These loans enable businesses to purchase equipment while spreading the cost over time, making it more manageable and allowing companies to preserve cash flow for other operational needs.
Specifically used for purchasing new or used equipment, machinery, vehicles, and technology needed for business operations.
Equipment finance loans typically have fixed or variable interest rates and set repayment terms, usually ranging from one to ten years.
The equipment itself often serves as collateral for the loan. Since these are collateralized loans, this allows for longer payback terms and lower rates.
Depending on the lender and the type of equipment, a down payment may be required, although some lenders offer loans with little to no down payment.
Borrowers may be able to deduct interest payments on their loans as a business expense, and they can also claim depreciation on the purchased equipment.
Lenders may offer different financing options, including direct loans, leases, lines of credit, and lease-to-own agreements, allowing businesses to choose the structure that best suits their needs.
Determining whether equipment financing is right for you depends on several factors related to your business’s needs, financial situation, and long-term goals. We at Lanam will guide you through all of these factors and help to weigh options to give you the best program to fit your needs, but here are some considerations to help you make an informed decision:
Type of Equipment: Consider whether the equipment is essential for your operations. If it significantly impacts productivity or service delivery, financing may be beneficial. Frequency of Use: If you need equipment that will be used regularly but may become outdated quickly, leasing or financing might be more advantageous than purchasing outright.
Cash Flow: Analyze your current cash flow. If upfront costs are a concern, equipment financing allows you to spread payments over time, preserving working capital. Creditworthiness: Assess your business credit score. Strong credit can lead to better financing terms, while poor credit may limit options or increase costs.
Growth Plans: If you plan to expand or upgrade your operations, financing equipment can provide the necessary tools without straining your budget. Commitment to Technology: If your industry is rapidly evolving and requires the latest technology, financing can help you stay competitive by allowing for regular upgrades.
Leasing vs. Purchasing: Evaluate the total cost of ownership for both leasing and purchasing options. Consider factors such as maintenance, potential resale value, and long-term usage. Financing Options: Some lenders may offer more favorable terms or flexible repayment plans. Apply with a network or platform that offers many different financing options to ensure you get the best terms without having to shop financing and harm your credit.
A SBA Loan is a business loan guaranteed by the Small Business Administration (SBA). While these loans are issued by banks, private institutions or local firms, they are guaranteed or insured by the SBA to reduce risk on lenders and offer more favorable terms than other business term loans as a result. There are also several different kinds of SBA Loans, the SBA Express, 7A, 504, SBA Microloans, and other export and international programs.
Guaranteed by the SBA and often available for small businesses that don’t qualify for typical bank loans.
One of lowest-cost loans on the market with longer payback terms and favorable rates.
an SBA 504 loan can be used for assets like property and equipment, offering some of the longest payback terms and hence the lowest monthly payments.
SBA loans can be a great option for many small businesses seeking affordable financing with favorable terms. However, they require careful consideration of your business needs, eligibility, and willingness to commit to the application process. If you believe an SBA loan aligns with your business goals and financial situation, it may be worth pursuing. Consulting with an Lanam advisor or SBA representative can provide tailored insights to help you make an informed decision.
These flexible loans can be used for expansion, construction costs, refinancing debt, purchasing materials and inventory, purchasing equipment or real estate, supplies — even existing businesses.
This type of loan comes with different requirements for credit, cash flow and documentation but Lanam is here to help you sort through all of it, simply.
Typically businesses that are profitable, in business for 2+ years, and have a minimum FICO score of 650-680 and most importantly a need for working capital or a large expenditure or purchase.
A line of credit is a flexible loan option that allows borrowers to access a predetermined amount of funds from a lender, which they can draw upon as needed and only pay interest on the portion of funds they use, for the time that they use it. Unlike a traditional loan where a lump sum is disbursed upfront and the interest schedule is determined ahead of time, sometimes with a prepayment penalty, a line of credit provides ongoing access to funds up to a specified limit and can be paid off at any time to stop interest from accruing.
Some lines of credit may come with annual fees, maintenance fees, or costs associated with accessing the funds.
If the line of credit has a variable rate, payments can increase if interest rates rise.
Responsible use can positively impact your credit score, while over-reliance or missed payments can harm it.
Deciding whether a line of credit is right for you depends on your financial situation, needs, and goals. When considering a line of credit, it's essential to understand the terms, costs, and your own financial situation to ensure it aligns with your borrowing needs and repayment capabilities.
Short-Term Financing Needs: If you need funds for short-term expenses or cash flow management, a line of credit can provide immediate access to cash and can bridge the gap between expenses and receivables. Ongoing Access: If you anticipate needing flexible funding over time and frequently with the ability to pay it back quickly—such as for inventory purchases, operational costs, or unexpected expenses—a line of credit can be a good fit.
Cash Flow: Assess your cash flow patterns. A line of credit can help bridge gaps in cash flow, but it’s important to ensure you can manage repayments. Creditworthiness: Consider your credit score and financial history. A strong credit profile can help you secure better terms and interest rates.
Draw as Needed: If you prefer the ability to draw funds as needed and payback quickly to keep interest cost down rather than taking a lump sum loan with a longer repayment term and higher interest cost, a line of credit offers that flexibility. Revolving Access: The ability to borrow, repay, and borrow again within your credit limit allows for more control over your financing.
Interest Payments: Understand that interest is typically charged only on the amount you borrow, which can be more cost-effective than other types of loans. Fees: Be aware of any fees associated with the line of credit, such as annual fees or withdrawal fees, and consider how these impact your overall costs.
Managing Debt: Consider your comfort level with debt. A line of credit requires discipline to ensure you don’t overspend and can manage repayments effectively. Variable Interest Rates: If the line of credit has a variable interest rate, be prepared for potential fluctuations in your payments.
Strategic Financial Planning: Evaluate how a line of credit aligns with your long-term financial goals. If you’re looking for a tool to support growth or manage ongoing expenses, it can be beneficial.
A real estate loan is a type of financing used to purchase, refinance, or improve real estate properties. These loans are secured by the property itself or another property, meaning that the lender has a claim to the property if the borrower fails to repay the loan. Real estate loans are commonly used by individuals and businesses alike for various purposes.
Real estate loans provide access to capital from the equity on a property and using the property as collateral. If you are looking to purchase or refinance a property or own a property and want to pull cash out to use for other purposes a real estate loan may be right for you.
Mortgage interest payments may be tax-deductible, offering potential savings for homeowners.
Investing in real estate can lead to long-term financial growth as property values may increase over time.
Determining whether a real estate loan is right for you involves considering various factors related to your financial situation, goals, and the specifics of the property that you own or are looking to purchase. Here are some key considerations to help you evaluate if a real estate loan is suitable for you:
Business loan with real estate as collateral: If you are looking for a business loan but not meeting criteria for unsecured term loans, a secured loan using your real estate may be the best option, this can offer some of the best payback terms and lowest rates since it is a secured loan. You can also use the funds for business or other purposes Purchasing Investment Property: For purchasing rental or investment properties, assess whether the potential rental income will cover mortgage payments and other expenses. Refinancing existing loan or mortgage: If you currently own a property and are considering refinancing to take advantage of lower interest rates or to access equity, evaluate your goals for refinancing.
Income Stability: Ensure you have a stable and sufficient income to manage monthly mortgage payments and other associated costs (property taxes, insurance, maintenance). Credit Score: Check your credit score. A higher score often results in better loan terms, including lower interest rates. If your credit is low, consider improving it before applying.
Initial Investment: Determine if you have enough savings for a down payment (typically 3% to 20% of the purchase price) and closing costs (which can range from 2% to 5%). Emergency Fund: It’s advisable to have an emergency fund to cover unexpected expenses related to homeownership.
Ownership Plans: Consider how long you plan to stay in the property. Real estate is generally a long-term investment, so ensure your plans align with this. Future Financial Plans: Assess how taking on a mortgage fits into your broader financial goals, such as retirement savings, education expenses, or other investments.
Real Estate Market: Research the local real estate market. Are property values rising or falling? Understanding market trends can help you make a more informed decision. Interest Rates: Keep an eye on current interest rates. A lower rate can significantly impact your monthly payments and overall loan costs.
Market Fluctuations: Be aware of the risks associated with real estate investing, such as property value fluctuations, changes in interest rates, and potential maintenance costs. Tenant Risks: If purchasing an investment property, consider the risks related to tenant vacancies, property management, and maintenance issues.
Unsecured loans are loans that are not backed by collateral. Unlike secured loans, where the borrower pledges an asset (such as a home or car) to guarantee repayment, unsecured loans rely solely on the borrower’s creditworthiness and ability to repay. This means that if the borrower defaults, the lender cannot automatically claim any of the borrower’s assets.
Our product, revenue-based financing, provides upfront capital in exchange for a set amount of the business’s future revenue. Payments are simply a percentage of revenue. So if revenue decreases, payments can too – and the total payment amount stays the same, even if it takes longer to pay.
Borrowers do not need to provide any assets to secure the funding, making it easier to obtain for those without valuable collateral.
Generally, unsecured and revenue based programs do not have interest rates and costs are typically higher than those on secured loans due to the increased risk for the lender. Borrowers with good credit may qualify for lower rates.
The amount that can be borrowed varies based on the lender, the borrower’s credit history, and income. Typically, unsecured funding tends to have lower limits compared to secured loans, also because the repayment terms are typically shorter time periods than secured loans.
Unsecured funding usually has fixed repayment terms, with set payments over a set period, typically ranging from a few months to several years. However revenue based financing payments are simply a percentage of revenue. So if revenue decreases, payments can too – and the total payment amount stays the same, even if it takes longer to pay.
Unsecured funding can be a suitable option for individuals who need quick and easy financing without collateral and have either the creditworthiness to secure favorable terms or enough business revenue. However, it's crucial to assess your financial situation, ability to manage debt, and specific needs. If you feel confident in your capacity to repay and have a clear purpose for the funds, then unsecured funding could be beneficial.
Specific Needs: Identify what you need the loan for—such as starting a new project, covering unexpected expenses, purchasing material, covering payroll, or bridging the gap in your receivables. Unsecured funding can be versatile but should align with your specific financial goals.
Credit Score: Check your credit score. Unsecured funding programs typically require a good to excellent credit score to qualify for favorable terms. If your score is low, you may face higher interest rates or cost. Credit History: Consider your credit history. Lenders will assess your borrowing behavior, including payment history and outstanding debts.
Income Stability: Ensure you have a stable and sufficient income to comfortably manage payments. This is crucial for avoiding defaults. Existing Debt: Assess your current debt levels. If you already have significant debt, taking on more could lead to financial strain.
Cost of Borrowing: Understand the cost associated with unsecured funding. They tend to be higher than secured loans due to the lack of collateral. Calculate how much you will pay in cost over the repayment term. Funding Terms: Review the repayment terms. Make sure you can commit to the payment schedule without jeopardizing your financial stability.
Debt Management: Consider your ability to manage debt responsibly. Unsecured funding can lead to higher debt levels if not handled carefully. Assess your habits with credit and repayment. Financial Emergency Plan: Have a plan for financial emergencies. If you face unexpected expenses or a change in income, will you be able to continue making payments?
Other Financing Sources: Evaluate other financing options, such as secured loans or credit cards. Compare the terms, interest rates, and your likelihood of approval.
Term loans are a type of financing that provides borrowers with a lump sum of money that is repaid over a set period, known as the term of the loan. These loans are typically used for specific purposes, such as purchasing equipment, funding expansion, or covering operating costs. Term loans can be offered by banks, credit unions, private funds, and other financial institutions.
Usually repaid within one year, short-term loans are often used for immediate cash flow needs or working capital.
Typically have a repayment period of one to five years, these loans are often used for purchasing equipment or funding specific projects.
With repayment periods exceeding five years, long-term loans are often used for significant investments, such as real estate purchases or major business expansions. These would include SBA Loans, Secured loans and some Real Estate loans.
Term loans can be an effective financing option if you have a clear purpose for the funds, a stable income, and a solid repayment plan. They are particularly useful for significant investments and can help you manage large expenses over time. However, it’s crucial to thoroughly evaluate your financial situation, potential risks, and how the loan aligns with your overall goals.
Specific Needs: Identify what you need the loan for, such as purchasing equipment, expanding your business, or funding a major project. Term loans are typically used for significant expenses. Amount Required: Ensure the amount you need aligns with the typical range of term loans, which can vary significantly.
Income Stability: Assess your income to ensure you can comfortably make regular payments over the loan term. Consider your current cash flow and any potential fluctuations. Existing Debt: Review your current debt obligations. If you have a high debt-to-income ratio, taking on additional debt may be risky.
Credit Score: Check your credit score, as lenders will evaluate your credit history when considering your application. A higher score can lead to better interest rates and terms. Credit History: Consider your overall credit history. A strong track record of repayment can improve your chances of securing a loan.
Cost of Borrowing: Understand the interest rates associated with the loan. Compare fixed vs. variable rates, and calculate the total cost over the term. Loan Terms: Review the repayment period and ensure it aligns with your ability to repay the loan. Longer terms can mean lower monthly payments but higher overall interest costs.
Repayment Ability: Evaluate whether you can commit to the repayment schedule. Consider any potential changes in your financial situation that could impact your ability to pay. Secured vs. Unsecured: If the loan is secured, be aware of the risks involved, as defaulting could result in losing the collateral.
Future Financial Plans: Consider how taking on a term loan fits into your long-term financial goals. Will the loan help you achieve a significant milestone or improvement in your financial standing? Growth Potential: If the loan is for business purposes, assess the potential return on investment. Will the loan lead to increased revenue or profitability?
Specialty financing refers to a range of financial products and services that cater to specific needs or industries, rather than general-purpose lending. These financing solutions are designed to meet the unique requirements of certain businesses or individuals, often involving specialized terms, structures, or repayment plans. Specialty financing can encompass various areas, including asset-based lending, inventory financing, invoice factoring and more.
Specialty financing may have specific eligibility criteria based on industry, creditworthiness, and financial stability.
Depending on the nature of the financing, rates and fees can vary, and borrowers should understand the total cost of financing.
Some specialty financing products can be more complex than traditional loans, requiring thorough understanding and evaluation.
Specialty Financing like invoice factoring or inventory financing are usually the most specific to a business' needs. For example, while most businesses can use an SBA Loan or Line of Credit, most businesses may not be able to benefit from invoice factoring. Be sure to speak with an Lanam representative and explain your business and financial needs and we will suggest if any of these programs could work for your business.
Purpose of Financing: Identify what you need the funding for. Specialty financing is often tailored for specific purposes, such as for car dealerships to purchase inventory, manufacturing companies who need to collect on their receivables faster than their customers payment terms allow, or retailers than need to purchase a lot of inventory and can finance it instead of paying for it in cash. If your needs align with these programs, specialty financing may be a good fit. Industry Requirements: Consider whether your industry has unique financing needs that traditional loans do not address. Specialty financing may provide solutions designed specifically for your sector.
Business Model: Assess your business model and growth potential. If you’re in a growing industry or have a clear plan for expansion, specialty financing could help you capitalize on opportunities. Cash Flow Considerations: Evaluate your current cash flow and financial health. Specialty financing often comes with flexible terms that can help manage cash flow effectively.
Knowledge of Products: Ensure you understand the specialty financing products available to you. Research the terms, conditions, and repayment options to determine which might best suit your needs. Lender Expertise: Look for lenders that specialize in your industry. Their expertise can provide valuable insights and support throughout the financing process.
Eligibility Criteria: Check the eligibility requirements for the specialty financing options you’re considering. Factors such as creditworthiness, financial stability, and industry experience may influence your ability to secure funding. Documentation Requirements: Be prepared to provide detailed documentation related to your business and financing needs. Specialty financing may require more specific information than traditional loans.
Interest Rates and Fees: Compare the interest rates and fees associated with specialty financing to other financing options. Ensure you understand the total cost and how it fits within your budget. Long-Term Financial Impact: Consider how taking on specialty financing will affect your long-term financial health. Ensure that the benefits outweigh the costs.
We make the process simple. If you do not have any of the documentation just let us know and we will work around it. Each program requires different documentation, some programs require very little. We can best advise by understanding your situation and have programs for every business.
Last 4 Months of Business Bank Statements (required) Filled out and signed application (required - Click the Apply Now) Business Debt Schedule - (optional, only for certain programs)* 1-2 Years Business Tax Returns - (optional, only for certain programs)* 2 Years Personal Tax Returns - (optional, only for certain programs)* Interim YTD Financials (Profit & Loss Statement & Balance Sheet) (optional, only for certain programs)*Minimum qualifications for any type of business funding are:
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