In business, bigger businesses asking what the rates for equipment leasing may be is no big deal, as they have been in the game for a while and have probably acquired quite a bit of good credit. Paying for rates that may be more expensive is a non-issue, since most successful businesses maintain a steady influx of cash. For smaller businesses just starting out, however, that have very little to no backup cash and a business credit score yet to be determined, asking the rates for equipment leasing can be a bit more intimidating. To help your business prosper, below is the differences between types of financing, and the general details on the rates you may experience.
Consumer Financing vs. Business Financing
For consumers, if around 6 or 7 percent of loans are not paid off, the consumer suffers greatly. In the world of business financing, 15 to 20 percent default rate is fairly average, with many lenders offering rates at 50% or higher. Because business owners, especially beginning entrepreneurs, are looking for a cheap lender, many small businesses owners get scammed out of what little they have. Be sure to do thorough research before committing yourself to a lender, and always observe all of your options.
How High Rates Are for Equipment Financing
Rates for equipment financing can differ quite significantly from lender to lender, and oftentimes only the lowest rate is advertised. Consider hiring a professional to help sort out which option would benefit your business most, and do not fall into one of the many traps scam artists set so well. A surprising amount of lenders are prone to lying about their rates, which can quickly send you and your business into bankruptcy.
Why the Rates Do Not Matter
When it comes down to it, all that really matters is your business credit, as that is what will either make or break your entrepreneurial career. With bad rates and good credit, you could still be making a significant profit in your specific field of work, so imagine how much you could be making with low rates. In business, financing is more about how much revenue will be pulled in according to how much was spent on the equipment that made it happen.
No matter what business you may be in, it is important to look over every option you have when it comes to the rates on equipment financing. Bad rates could send your business credit plummeting to the ground, so always be sure you have made the decision that most benefits your business.