Deploying new equipment in your business is a great way to quickly activate business growth, improve productivity, and create competitive advantage. If you don’t have enough funds to purchase equipment that’s vital for day-to-day running of your business, obtaining an equipment loan is a brilliant idea. Whether you’re looking to get an equipment loan to jumpstart a startup business or propel an established one, you need to acquaint yourself with the procedure. Here are some helpful tips on how to get an equipment loan in Canada:
Prepare yourself with relevant information
Before making your first call to an equipment finance company, you need to prepare yourself by doing the following:
- Get your credit report: To determine your creditworthiness, lenders will be interested in knowing your credit score. If you don’t know it, you can request a free copy from both national credit bureaus, TransUnion Canada and Equifax Canada. You can order your credit report by phone or mail.
- Get all paperwork ready: You’ll need to obtain your last 3 months of bank statements or a recent financial statement, a year of tax returns, and list of collateral.
- Obtain details of the equipment: You should have a general idea of the equipment you intend to purchase, and how much it costs.
- State your reasons for buying: You should prepare an explanation of why you want to purchase the equipment.
Select your Source of Equipment Loan
Truck loans are very popular in Canada, and it’s important to know where to turn if you need financing quickly.
There are various sources that you can obtain equipment loan from depending on the nature of equipment to be bought and your creditworthiness. These sources include:
- Government-backed SBA loans
- Credit unions
- Commercial banks
- Online lenders
Remember that rates and terms for equipment loans vary from one lender to another. You should compare the lenders so you can find the one with the favorable terms.
Send an application
Just like with other business loans, ensure that you have all the necessary documents required by the particular lender you’re applying the equipment loan from. If you’re applying for the equipment loan at the bank, you’ll have to meet with a loan officer at the local branch. If you intend to work through an equipment dealer, you may have to deliver your application on site. If you intend to use an online vender, the application will most probably take place online via their website.
Some of the most popular types of equipment in Canada includes truck and trailer financing, specifically highway trucks, semi trucks and other transportation equipment.
Wait for approval
The approval time varies from one lender to another. Once everything has been taken care of, you can expect your deal to fund within a few business days. Remember that the type of documentation and amount will vary from one lender to another. For example; a bank may require a business plan, while an online lender may not.
With the availability of equipment loans, you don’t have to wait to find extra money to buy the equipment you need to run your business. You can get state-of-the-art equipment, from computers to heavy machinery, and start utilizing them to expand your business today. The revenue generated could even be used to pay off your loan.
If you are having a hard time getting approved for a truck loan in Canada, make sure to visit Smarter Loans – Canada’s Loan Directory, to browse the top truck financing providers in the country.