If you have been in the construction business for a while, you probably already understand the merits of equipment financing. With most of the companies required to operate from computers to fleet vehicles and the equipment-intensive nature of the construction industry, the owner needs to have a well-managed cash flow to handle both the equipment side and the administrative side of the business.
With companies seeking to acquire external options to fund their equipment spending apart from the internally generated cash flow and credit lines, having a bad credit score can hinder their possibilities. In the light of the clouded judgment of business owners, some financing providers or lenders tend to take advantage of their position with shams and lies.
In this article, we will be mentioning the top three lies you must stay away from while applying for construction equipment financing with bad credit.
THE BAIT AND SWITCH
You are likely to come across lenders and finance providers who will quote a payment for the lease, present a contract saying that you own the equipment for the final settlement of X amount. Then the contract somehow turns out to be different than what you expect. Make sure you run a check on the company and look out for the reviews. If a company has done this, chances are you can easily spot a lot of negative reviews about them.
THE EVERGREEN CLAUSES
This one is high on the list of “things that should be illegal but are eventually normalized.” Be it in the form of hidden clauses, setting sneaky timelines and dates that state if a person fails to notify within this-and-this date, the contract rolls over automatically or something along the same lines; these companies have zero best interest for the borrower. On true leases where you receive a significant amount in the end, but for smaller buyouts, you need to keep an eye on such gimmicks.
LEASING OVER RENTING ALWAYS
Some companies might try to convince you that leasing is always better than renting. The one thing to remember is that it is not always at all. It will depend on the type of rental, the terms of the rental-purchase option (RPO), and your financial situation.
Staying away from equipment financing is not a solution to prevent any fraudulent happening. Equipment financing is advantageous that ensures the smooth functioning of your business. Apart from meeting your financial ends, the flexible financing options improve your expense planning, promote business cycle flexibility, reduce risk and help you manage obsolescence. The right application of the benefits of equipment financing with a reliable partner enables you to acquire the equipment that your company needs without hamstringing your budget or future business expectations.
If you want to explore your construction equipment financing options with bad credit, connect with our reliable experts at (678)-203-1497 or browse our website.