Types of Equipment Financing
This type of financing involves borrowing money to purchase equipment and paying it back over time.
What is a loan?
This term refers to the initial payment made when financing equipment.
What is a down payment?
This important resource is preserved by not paying the full cost upfront.
What is cash flow?
This risk involves the possibility of not being able to make the required payments.
What is default risk?
This type of institution is a common provider of equipment loans and leases.
What is a bank?
This financing option allows businesses to use equipment without owning it, typically involving monthly payments.
What is a lease?
This is the interest rate charged on the borrowed amount for equipment financing.
What is the APR (Annual Percentage Rate)?
Financing equipment can help businesses maintain this, which is crucial for obtaining other types of financing.
What is credit?
This risk is associated with the equipment becoming outdated before the end of the financing term.
What is obsolescence risk?
These specialized companies focus solely on providing equipment financing.
What are equipment finance companies?
This type of lease allows the lessee to purchase the equipment at the end of the lease term for a predetermined price.
What is a capital lease?
This term describes the total cost of borrowing, including interest and fees.
What is the total financed amount?
This service allows businesses to upgrade to the latest technology without large upfront costs.
What is Hardware-as-a-Service?
This risk involves the potential for the equipment to lose value faster than expected.
What is depreciation risk?
This government-backed program helps small businesses obtain equipment financing.
What is the SBA (Small Business Administration) loan program?
This financing method involves selling equipment to a lender and then leasing it back.
What is a sale-leaseback?
This is the value of the equipment at the end of the lease term.
What is the residual value?
Financing can provide this tax advantage, reducing taxable income.
What is a tax deduction?
This risk is related to changes in interest rates affecting the cost of financing.
What is interest rate risk?
This type of lender is a subsidiary of a larger corporation that provides financing options for the parent company's products or services.
What is a captive finance company?