How to Get a Machinery Loan For Your Manufacturing Company or Startup
Do you Need A Machinery Loan
If you consider yourself to be an enterprise that needs expensive machinery to operate, you may want to think about applying for a machinery loan. If it’s desks, computers and printers you need, then this is not the right loan for you. Have a look at an office equipment loan instead. Here are a few examples of those who are likely to need a loan for machinery:
A jewellery maker who needs machinery for soldering
A company the manufactures small parts and needs an industrial 3D printer
A company that needs an Airbench for a large warehouse.
A marketing company who may need a large format printer.
Should You Loan or Rent
One thing that many business owners find themselves considering is if they should take out a loan on their machinery or just simply lease it. If you are guaranteed to be working with very large scale projects on a regular basis then it could make a lit of financial sense to just lease, as that can be written off against your tax bill every month. Also, you would not have been responsible for any upkeep or repairs on any products as you do not own them, this would be the responsibility of the leasing company. Inevitably this is a financial business decision that needs to be based on your future projections for your business and its profits.
If you’re unsure ask your business advisor to work with you to create some future profit forecasting to advise where your business might be over the next 5 years and therefore which option you should do.
Where To Turn For a Machinery Loan
There are a few institutions you can turn to if you need a loan depending on the size of financing you need.
Take a trip to your local bank and speak to an advisor. Even though they are becoming harder and harder to get, banks do have the facilities to offer credit. Just make sure you have a tip-top credit score and try and make sure you have an already healthy bank balance.
Credit Unions are well known for being happy to take on loans from small businesses. They tend to have less capital but they also provide more assistance than some of the larger financial institutions.
You can also think about starting a crowdfunding campaign using companies like GoFundMe or FundingCircle. Depending on the size and the nature of your enterprise you may find people more keen to supply you with the capital that you need.