Regents Capital, Author at Regents Capital

Pros and Cons of Business Bank Loans

Business bank loans are a popular choice among companies but can be difficult to obtain. Learn the pros and cons of business bank loans.

It’s no secret that banks offer businesses a range of helpful products, such as business savings, checking and money market accounts, business certificates of deposit (CD), and treasury services. Banks also afford business owners the convenience of tools such as online banking and mobile apps.

An estimated 94% of business owners have bank deposit accounts¹, so it is no surprise that owners look to banks for loans. However, many business owners find it challenging to secure the funding they need. The Small Business Credit Survey report published by Fed Small Business in March 2024 reveals that 34% of business loan applications were denied by large banks in 2023, and small banks denied 25%².

In this Regents Capital blog article, we discuss the pros and cons of business bank loans and explain nonbank lending alternatives that offer easier loan qualification requirements and quicker funding.

Pros of business bank loans

Existing relationship with bank

Business bank loans are a common source of financing for small business owners who have their personal and business banking accounts at the same bank. Since the owners already have a relationship with their bank, it is often the first option they consider for business loans. So, an existing relationship with a bank is one of the obvious pros of business bank loans.

Low interest rates

Banks typically offer lower interest rates on business loans than other funding resources. However, they have strict underwriting criteria and procedures for assessing borrowers’ creditworthiness. This helps them mitigate potential risks and provide favorable interest rates to business owners with good credit scores.

SBA loans

Most banks offer Small Business Administration (SBA) loans, which include SBA 7(a) loans and SBA CDC/504 loans. These government-backed loans are designed to provide financial support to small businesses. It is worth noting that SBA loans have a lengthy application process (a multitude of business documents are required), and business owners will need strong financials and a solid credit profile to qualify. Lastly, the entire SBA loan process—from application to approval to funding—can take up to a few months.

Cons of business bank loans

Lengthy application process

Applying for a bank loan can often be a time-consuming and challenging process. Each bank is different, but commonly required documentation when applying for a business bank loan includes personal information (contact information, personal financial statements), business license, incorporation documents, business plan, financial documents (e.g., business bank statements, business tax returns, balance sheets, income statement), and legal documents.

Rigorous eligibility requirements

Qualifying for a business bank loan can be difficult for any business owner who doesn’t have a high credit score, robust revenue, strong cash flow, and several years in business. In addition, banks might require collateral (more on that below) and a signed personal guarantee when making approval decisions.

Collateral requirements

When business owners seek loans from banks, they may be required to provide collateral as security for the loan. Collateral can take various forms, such as equipment, inventory, or personal assets like homes or vehicles. While this requirement gives banks a sense of security, it also poses a risk to business owners as their assets may be at stake if they fail to repay the loan.

Slow turnaround times

Because banks require extensive personal and business documentation when a business loan application is submitted, they need more time to review it and make an approval decision. Depending on the bank, decisions can take multiple days or even weeks, and this does not include the time to deliver funding. Therefore, business owners needing immediate access to funding might opt for a working capital loan from a nonbank lender like Regents Capital.

Possible need to visit a bank branch

Most large banks have online business loan applications for their business customers. However, owners who are not customers usually need to open a business bank account and schedule an in-person appointment to facilitate the business loan application process. This takes time away from owners’ daily responsibilities of running their companies.

Pros of getting a business loan from Regents Capital

Now that we’ve discussed the pros and cons of business bank loans, we wanted to share some of the pros of getting a business loan from Regents Capital. For starters, we are a leading nonbank lender that has delivered working capital loans to small businesses in countless industries across the United States, many of which could not secure loans from their bank.

By offering less stringent borrowing requirements and tailored working capital loan solutions, Regents Capital can provide the necessary funding for any business need. Your loan can cover the cost of inventory, supplies, employee payroll, office rent, marketing, and more.

Unlike banks, Regents Capital affords you the benefits of a quick loan application process that only asks for basic information about you and your business, along with a faster approval process and funding. We offer working capital loans up to specific amounts with same-day funding during regular business hours. All with the competitive rates and flexible repayment terms you want. Finally, we pride ourselves on providing informative, unhurried, and responsive customer service at every step.

We welcome the opportunity to serve you, so contact us today to get started!

Disclaimer.

This Regents Capital blog post is purely educational and features general information and opinions. Nothing contained herein is intended to constitute advice or recommendations and should not be treated as such. Regents Capital is not affiliated with nor endorses Fed Small Business.

Sources:

^1,2htttps://www.fedsmallbusiness.org/reports/survey/2024/2024-report-on-employer-firms

4 Advantages of Nonbank Business Lending

Securing a bank loan or financing for your business can be challenging, but options exist. Learn four advantages of nonbank business lending.

You’ve probably heard the age-old saying, “It takes money to make money,” which holds true in business. You need money to grow or expand your business, acquire assets, cover operating costs, and keep your business afloat during unexpected slow periods. However, securing a business loan or financing from a bank can be challenging due to their tightened borrowing requirements.

The U.S. Federal Reserve surveyed bank lending practices in mid-2023, revealing that “major and significant net shares of banks reported having tightened standards on loans to large and middle-market firms and small firms, respectively.”¹

Many business owners have experienced the disappointment of receiving a rejection notification from their bank. But fear not! The lending landscape is rapidly evolving, thanks to nonbank lenders like Regents Capital, which understand businesses’ unique needs and challenges and offer more flexible and accessible loans and financing options. Keep reading this Regents Capital blog article to learn four advantages of nonbank business lending.

What is nonbank business lending?

As the name implies, nonbank business lending refers to loans and other financial services offered by entities (nonbank lenders) other than traditional banks. Nonbank lenders leverage technology and data analytics to streamline the borrowing process for business owners.

One key advantage offered by nonbank lenders is their ability to extend business loans and financing products to businesses that may not meet the strict criteria set by banks. Regents Capital, for example, utilizes alternative underwriting methods and considers factors beyond credit scores to offer opportunities for businesses that would otherwise be left out of the borrowing market for working capital loans, lines of credit, and other funding solutions.

Now, let’s take a look at the four key advantages of nonbank business lending.

1. Easier application process

Banks typically require lengthy applications for business loans and financing. They might ask for a business plan, a business loan proposal (this outlines the purpose of the loan and how you intend to use it), personal and business tax returns, articles of incorporation, and legal contracts/agreements, to name a few.

Nonbank lenders, on the other hand, afford you the convenience of a simple application process that requires far less documentation. At Regents Capital, you can apply for business funding online in minutes; our application asks for basic information about you and your business and other documents depending on the type of funding and the amount you are requesting. With minimal documentation requirements, you can say goodbye to the tedious paperwork associated with traditional bank loan applications.

2. Faster approval decisions

Whether you’re a small business or an established middle-market company, securing quick access to capital can be the key to seizing growth opportunities and staying ahead of the competition. That’s where nonbank loans and financing come into play.

Because less documentation is required when applying for business funding from a nonbank lender, and the borrowing requirements are less stringent than those at a traditional bank, you can expect to receive an approval decision promptly.

3. Less-stringent credit score requirements

Traditional banks often rely primarily on credit scores to determine business loan and financing eligibility. This can be a significant setback for business owners with a low credit score or limited credit history. Nonbank lenders, however, offer greater flexibility regarding credit scores.

A good credit score will boost your chances of getting your funding request approved at Regents Capital. However, we also consider other factors, such as your time in business and annual revenue. If you have a below-average credit score or limited credit history, you may still be able to obtain one of our business funding products.

4. Quicker funding turnaround times

As mentioned earlier, traditional loan and financing processes often involve lengthy paperwork and strict eligibility criteria, which can delay decision-making and funding turnaround times. However, nonbank lenders have made obtaining business funding faster and more convenient.

Let us say you apply for business funding from Regents Capital. Once you submit the required information and documentation, we will review it promptly during our regular business hours and provide you with a decision. If your application gets approved, you can expect to receive funding quickly. We can often fund specific loan and financing amounts on the same day applications are submitted and approved.

Conclusion

If you seek a loan or financing for your business and want to avoid extensive documentation, high credit score and collateral requirements, and lengthy approval processes, consider a nonbank lender like Regents Capital. We’ve helped businesses in countless industries nationwide get the funding they need, often after their loan and financing requests have been denied by a bank.

Disclaimer.

Sources:

1 – https://www.federalreserve.gov/data/sloos/sloos-202307.htm

How to Overcome Business Financing Obstacles

Securing business financing can be challenging. However, there are non-bank alternatives that can bridge the financial gap.

Running a business comes with a number of responsibilities. You not only have to manage day-to-day operations but also take steps to maintain the success and growth of your company. From setting actionable goals to managing employees to making strategic decisions, your duties as a business owner are diverse and demanding.

Financial management is yet another critical duty that falls on your shoulders. You must ensure your company’s finances are in order by monitoring cash flow, budgeting effectively, tracking expenses, and maximizing revenue generation opportunities. Securing financing from a traditional lender for capital equipment, technology refreshes, expansion efforts, or growth initiatives may be challenging. However, there are non-bank alternatives to consider.

In this Regents Capital blog article, we discuss signs that your company needs financing and explain how you can overcome borrowing challenges and secure the financing your business needs to thrive.

Signs that your company needs financing.

Every company is unique and has its own financial situation and growth goals. That being said, there are many common reasons why businesses need financing. Whether you run a small business or an established middle-market company, you might encounter financial gaps that need to be filled to seize growth opportunities and stay competitive. Following are signs that indicate your business needs financing.

You want to achieve a competitive advantage: Investing in new or upgraded equipment, vehicles, or technology can help set your company apart.
Your company’s profits are increasing: You may need to purchase inventory, invest in marketing, hire more employees, or expand your product or service line.
The market demand for your products or services is increasing: A surge in market demand for your products or services is a great sign, but it can present challenges if you lack the capital to meet your customers’ needs.
Cash flow issues: Your company’s growth can be hindered if it lacks funding for its daily operational costs. Moreover, insufficient cash flow can make paying bills and debts on time challenging.
Inadequate resources for innovation: A lack of funds can hamper your research and development efforts. This can set your company back in terms of innovation and advancement in an ever-changing business world.

By the numbers: Reasons businesses seek financing.

In a December 2023 business survey conducted by the National Federation of Independent Business (NFIB)¹, 29% of small business owners said their primary purpose for seeking financing was to expand their business. 26% of owners sought financing to meet operating and inventory expenses, and 24% sought financing to replace capital assets or make repairs.

Additionally, the survey revealed some roadblocks business owners experienced when applying for financing from traditional lenders. Among business owners who borrowed money, 30% were “not satisfied” with the amount and terms offered for the financing, 18% said collateral requirements were a “significant issue,” and 32% said the paperwork requirements were either a “moderate or significant issue.”²

How to overcome business financing obstacles.

One of the main difficulties in securing financing is meeting the stringent requirements set by lenders. Traditional lenders often require extensive documentation, including financial statements/paperwork, income tax returns, and business plans. This process can be time-consuming and overwhelming for business owners who are already handling multiple tasks and responsibilities.

The good news? Non-bank lenders such as Regents Capital are viable alternatives to traditional financing products. At Regents Capital, our financing solutions have more relaxed eligibility criteria, a straightforward application process and fast funding turnaround times. This helps make it easier for you to access much-needed capital. Regents Capital offers capital leases for equipment lease financing, equipment lines of credit, and working capital loans, among others.

What’s more, Regents Capital affords you the benefits of highly personalized financing. You will work with a dedicated finance manager who will help you choose a financing solution that aligns with your company’s requirements. Our team of experienced professionals understands the various business industries and market dynamics and can confidently help you navigate product offerings.

Regents Capital is ready to help.

While securing business financing from a traditional lender can present challenges, alternative options are available to help you overcome them. And you can find them at Regents Capital. So, if you need a custom-tailored financing solution with a favorable rate and flexible repayment term, Regents Capital is ready to help.

Regents Capital takes pride in being able to assist businesses across various industries throughout the nation in obtaining the financing they require. Even if traditional lenders have turned you away with a “no,” we can step in to provide solutions. We aim to help you overcome financial hurdles by offering alternative lending options tailored to your specific needs. With our expertise and wide range of financing options, we can find creative ways to help your business secure the funding it needs for growth and success – now and into the future.

Disclaimer.

Sources:

1 – https://www.nfib.com/content/press-release/economy/new-nfib-survey-small-business-owners-concerned-with-high-interest-rates/

2 – https://strgnfibcom.blob.core.windows.net/nfibcom/Financing-Sales-Survey.pdf

Finance Lease vs. Operating Lease: Which One Should You Choose?

If you want to get the equipment your business needs quickly, leasing is an option. But which type of lease is best for your company?

Equipment financing can be challenging when you’re running a small business. Your starting capital may not be enough to get the assets you need to outdo your competition. Seeking financing solutions to buy what your business needs can also be difficult, and complex. Fortunately, you have the option to lease instead of buy immediately.

Two of your options are finance leases and operating leases. But what’s the difference between the two?

What is a Financial Lease?

Also known as a capital lease, a financial lease involves creating a contract that entitles a business owner to rent out the temporary use of an asset, mostly equipment. This is usually done over a long period of time.

Pros

For accounting purposes, this lease is considered a purchase of an asset for you as a business owner. So you own it on paper, even though you still haven’t paid for it fully.
You take the present market value of your asset on your balance sheet. As such, you’re allowed to claim depreciation and reduce your taxable income.
You can reduce your taxable income further by claiming interest expense.

The advantages of a financial lease work to reduce your business taxes, and you get to own the equipment you’re paying for all these months. However, it does come with some disadvantages.

Cons

A capital lease agreement is classified as debt in your balance sheet. You repay through your lease payments. This increases your debt to equity ratio. Having your company operate more on debt than your wholly-owned funds might scare off your investors, as they may see it as a risky way of operating your business.
Another potential disadvantage of the finance lease is that your company has full responsibility for the maintenance of the equipment.
You’re also stuck with the pieces of equipment you rent out for the rest of your leasing term. If you’re using electronic tools, like computers, its components may be obsolete within a decade or even just a few years, leaving you at a competitive disadvantage.

What is an Operating Lease?

An operating lease allows you to rent out equipment from a lessee, but unlike a capital lease, you don’t have ownership rights to the asset. This type of lease isn’t included in the company balance sheet as well. At the end of your payment term, you can choose to buy the equipment at market value or return them to your lessor.

This type of lease is often short-term.

Pros

Gives you greater flexibility since it’s a short-term lease. If the equipment in your industry tends to become obsolete faster than other industries, an operating lease allows you to upgrade without the big cost.
Its tax benefits allow you to deduct the payments you make as an operating expense.
Because you’re not renting to own an asset, you’ll generally have to pay less for your monthly payments, compared to capital leasing.

An operating lease is ideal if you’re a business that needs regular upgrades to your equipment. However, it also comes with some downsides.

Cons

Because this type of lease allows you to upgrade whenever possible, you may find that you pay more for your equipment in the long run.
Although you can deduct your operating lease payments for your tax returns, you still don’t own the asset. As such, you may not be able to claim deductions for the depreciation of your equipment, unlike capital leasing.

Which Lease is the Best Option for Your Business?

Asset acquisition through leases is a practical way to run your business at a manageable cost. But consider your options carefully because finance and operating leases can be complex without factoring in your requirements and tax situation.

Consult with a Regent Capital consultant to ensure you’re getting one that’s favorable for your business.

Regent Capital is a trusted commercial finance company. We turn your real-world financing challenges into success stories and results. Call us today at (888) 901-4207 for details on how we can help your business!

True Tax Lease: How Does It Benefit Your Business?

There are multiple benefits of using a true tax lease to fund your commercial equipment needs. Regents Capital breaks it down for you.

There’s no other way around it: commercial equipment is expensive, especially for small businesses and start-ups. Purchasing equipment is not the only option, though. Equipment leasing is a more manageable way to get the equipment you need while spreading out the costs over a fixed period of time.

Leasing terms typically run from 24 to 72 months. Contracts can run for much longer, too, depending on your business needs. Either way, considering how new technologies are regularly added to commercial equipment, you do not have to worry about being stuck with obsolete equipment in the long run.

If you’re looking into equipment leasing, one of the best options is a true tax lease. And here, Regents Capital breaks down the reasons you should consider getting this type of equipment lease.

How Does a True Tax Lease Work?

A true tax lease is a multi-year equipment leasing option where the lessee gains exclusive use and possession of the equipment throughout the specified period. Ownership rights do not typically pass on to the lessee but at Regents Capital, the end-of-term buyout option is always on the table.

The name “true tax lease” stems from the fact that the lessor takes charge of all accounting requirements and tax benefits. Meanwhile, lessees pay lower upfront costs and can put monthly payments under capital or operating expenses. These payments are typically lower than non-tax leasing options.

Regents’ true tax leases include stretch, skip payment, step payment, and operating leases. Each one has multiple tax advantages. The lease period is also usually shorter than the equipment’s economic life.

Through operating leases and similar leasing options, you can get up to 100% financing for your required equipment. Soft costs like transportation and installation are also included.

How Do Businesses Benefit from a True Tax Lease?

True tax leases are a sensible option for business owners because the leased equipment doesn’t count as a company asset or liability. Yet, because the leased equipment generally counts as a rental expense, it still qualifies for tax incentives. Here are more ways businesses benefit from a true tax lease:

No Bank Restrictions

True tax leases take away the hassle of blanket liens, escalator clauses, restrictive agreements, and other restrictions that are typically linked with traditional lending institutions.

100% Financing Options

Equipment leasing doesn’t only involve the actual equipment. Businesses also have to consider soft costs like delivery and installation which can be covered by a true lease agreement.

Flexible Payment Options

Unlike with finance leases where ownership is transferred to the lessee after the lease term, the lessor retains ownership after a true tax lease. This helps keep monthly payments flexible.

Off-Balance Sheet Financing

The off-balance sheet financing option could count as operating expenses and make your payments 100% tax deductible, instead of just depreciation and interest deductions.

Secure Your Equipment Financing with a Trusted Partner

Regents Capital has direct funding capabilities that change the way businesses finance equipment. And we can provide affordable and transparent financing for your business.

Contact a Regents Agent today and learn about the financial service that works best for you.

What are Synthetic Leases & How Can They Help Businesses?

Synthetic leases are a method for adjusting accounts and tax books. But what are synthetic leases and what benefits do they offer businesses?

In 2001, businesses were looking for new ways to refine their accounts and tax books. This was especially hard for those with large stakes in real estate developments. Tax books needed to be as streamlined as possible to allow for larger write-offs. And accounts books needed to be as enticing as possible to potential investors.

Many companies turned to the then-novel method of synthetic leases. Synthetic leases were used to fuel large construction projects and draw in investors. It was a popular method for streamlining the books and project an image of strength and profitability.

However, the Enron Crisis in the earlier part of the century revealed the problems associated with such practices. New laws were passed to better control such effective methods and synthetic leases largely fell out of vogue.

Recently, developments and better legislation have resurrected corporate interest in synthetic leases. But what are synthetic leases and how can they benefit your business?

What is a Synthetic Lease?

A synthetic lease works as a two-man operation. A parent company wants to make their account books look more promising by removing assets that may devalue it. At the same time, they want to improve their tax records by keeping these assets for use. A synthetic lease is off-balance-sheet financing that is classified as a lease for financial purposes and as a loan for tax purposes.

The parent company sets up a special purpose entity, typically another company, that purchases assets.

This special purpose entity, which is still owned by the parent company yet operates as a separate organization, will lease the asset to the parent company.

The asset and its subsequent effect on accounts and income will fall on the special purpose entity. Meanwhile, the parent company that owns the special purpose entity can use the assets on their tax books.

But how is this arrangement different from a traditional lease?

Differences Between Synthetic & Traditional Leases

A synthetic lease is used by companies that are seeking off-balance sheet reporting of their asset-based financing as well as the tax benefits of owning the financed asset. The asset is owned by the lessor for accounting purposes but is owned by the lessee for tax purposes. For the parent company/lessee, the depreciation of the asset does not affect net income. The lessee can, however, claim depreciation deductions for tax purposes.

In a traditional lease, a completely separate entity owns the asset in question. All benefits, expenses, and responsibilities (i.e., taxes) associated with asset ownership are assumed by the lessor. The lessor is the owner for tax and accounting purposes.

But why would companies want to use this process? What’s in it for you if you use synthetic leases?

Why Consider a Synthetic Lease?

Synthetic leases became popular because they allowed companies to tidy up their books and decrease financial obligations associated with certain assets.

The following are a few of the benefits your business may enjoy when you use synthetic leases.

Because the property was bought and owned by a separate special purpose entity, that entity will have the property in their accounts books. Depreciated properties or properties tied up with legal or financial constraints can be set aside from the parent company’s books.
By putting ownership of certain assets under a special purpose entity, the parent company’s accounts book will appear more profitable. This can be used to attract new investors and secure future contracts.
Because the parent company still technically owns the special purpose entity, and thus its subsequent properties, they can put the asset they’re leasing into their tax books. This will allow the company to ask for write-offs when the asset devalues over time.

Synthetic leases offer companies a novel solution to owning property while preventing damage to their projected profitability.

So, when you need your business to attain new assets without major drawbacks, consider setting the groundwork for a synthetic lease today!

Regents Capital works alongside you to help you conquer financial challenges when securing capital.

Email us today [email protected] for further details on synthetic leases.

3 Factors to Consider Before Getting a TRAC Lease

Business owners can get a favorable TRAC lease when they negotiate with their lessor. Here, Regents Capital lists factors can be negotiated.

A TRAC lease, also known as a Terminal Rental Adjustment Clause lease, is a trailer and motor vehicle lease that enables adjustments to payment residuals, lengths, and terms while the lease is active. Instead of going through the trouble of getting financing for each trailer, car, or truck, a business owner can negotiate this kind of lease. They will rent the vehicle for a fixed period and has the option to buy it at the conclusion of the lease at an agreed-upon price.

When you are applying for a TRAC lease to meet your business needs, you want to get a favorable deal from your lessor. Here are a few factors that are up for negotiation:

The TRAC Lease Document

The master lease agreement, much like any legal document, has “boilerplate” provisions. Some of them may be negotiable.

One example is the cancellation notice. Many agreements come with boilerplate terms requiring a fixed notice both parties must provide to cancel. This is unnecessary (and up for negotiation) given that the master agreement cannot compel the lessee to lease anything.

Another provision is the state’s laws that will govern the TRAC lease agreement. This is often negotiable. As a lessee, you can cite the laws of your state rather than going with your lessor’s state.

Although boilerplate provisions help save time in negotiations, you should remember to change parts of the agreement to make the TRAC lease more advantageous for your business.

Billing & Payment Terms

You also have the option to negotiate the specific terms for billing. When discussing the agreement, you can make sure that the lessor accurately establishes the in-service date on the document.

Another area that is up for negotiation is the service level agreement. You can work with your lessor on the following details:

The billing termination date
The adjustment booking date
The sale date

Depending on the lender, another billing component you can discuss is the deficit interest charges. This amount isn’t large if you’re just looking at one vehicle unit.

If the agreement involves a fleet of a hundred vehicles, for instance, these charges can add up and turn into a large expense. Depending on the level of competition of the business and the fleet size, your lessor may choose to forgo this additional payment.

End of Term Options

TRAC leases combine all the advantages of leasing while retaining many of the upsides of ownership including the option to purchase the equipment at the end of the lease term. When your TRAC lease ends, you typically have the option to:

Purchase the equipment at the end of the lease term at a pre-determined residual agreed to when the lease starts.
Continue to lease the equipment at a reduced rate with payments based on the residual value amount.
Return the equipment to the lessor.

Depending on your cash flow needs, you can select a higher end-of-term residual amount for a lower monthly payment or keep the end-of-term residual lower to pay more through the stream of payments. This flexibility of payment options makes the TRAC Lease attractive to any business trying to improve their financial performance ratios and better manage their liquidity position and cash flows.

Turn to Regents Capital for Your TRAC Lease Needs

Regents Capital Corporation offers TRAC leases that you can use for over-the-road vehicles, such as trailers, tractors, and trucks. By working with us, you will enjoy flexible payment terms from 24 to 72 months depending on your business needs. You will also avoid compensating balance requirements, blanket liens, rate escalator clauses, restrictive covenants, and other surprises in conventional lending restrictions.

Fill out our contact form today, and we will have one of our agents meet with you to learn about your unique business needs.

Equipment Financing: Is It Right for Your Business?

When you need special machinery but don’t have the funds for it, equipment financing is a good option. But is it always the right solution for your business?

Every business uses different types of equipment for its daily operations — from the basic devices, such as mobile phones, tablets, and laptops to more specialized machinery, like diagnostics machines, tractors, and manufacturing equipment.

Industrial machines and equipment can be costly. New or aspiring entrepreneurs rarely have a big budget for advanced equipment. Even established businesses may not have the funds to replace their machinery in case of a breakdown.

These are a few of the instances when equipment financing can help!

When to Consider Equipment Financing or Equipment Loans

Whether you need to invest in specialized vehicles or machinery or purchase computers for a growing team, you need to consider how you can afford this equipment. With an equipment financing loan, you can immediately obtain working capital to lease or buy the equipment you need. Also, you can manage your cash flow seamlessly since this type of financing enables you to spread out your payments over a longer time frame.

Any business can apply for an equipment loan. According to the Equipment Leasing and Financing Association (ELFA), 79 percent of US businesses finance their equipment through leases, loans, and other lines of credit.

Below are some of the common examples of business-related items that you can finance with equipment financing:

IT servers, software, and other tech equipment
Medical imaging equipment
Construction equipment
Restaurant equipment like ranges and ovens
Farming or heavy agricultural equipment
Trucks and other business vehicles

Considerations for Equipment Financing

Before you sign up for a loan, it’s best to know the benefits and disadvantages of applying for one.

Consider the following pros and cons of equipment financing:

Pros of equipment loans.
- Spread the cost of your purchase. For any business owner, cash flow is critical. Equipment purchases, in some cases, can complicate it. With an equipment loan, however, you can spread your cost to prevent cash flow troubles. You can put a certain percent down and pay the annual interest rate within a certain period.
- Receive funding for the purchase or lease of equipment. Even if you run a well-established business, chances are that you can run short on equipment funds. Fortunately, equipment financing can bridge that gap. Since these loans allow you to borrow money to pay for equipment, you don’t have to wait until you have the money to make important purchases, leases, or repairs.
- Increase your business’s future sales. If you receive an equipment loan, it can improve your company’s overall productivity. Having the right machine can help you complete orders faster, which may increase the number of customers you can accommodate. In return, this will boost your bottom line.
Cons of equipment loans.
- Higher rates than traditional loans. Equipment financing typically offers favorable, fixed interest rates. But if you have a good credit history, you may find lower interest rates when you take out traditional loans instead.
- Usage is restricted to equipment. Equipment financing can only be used for the equipment you need. This means you can’t use the money to cover rent, payroll expenses, or anything else.

Regents Capital Can Find You the Perfect Equipment Loan for Your Business Needs

There are many considerations when it comes to applying for an equipment financing loan. If you need guidance on the type of loan or are actively looking for an equipment financing loan, Regents Capital Corporation is at your service.

Contact us today.

When Is Leasing Better Than Buying In The Medical Industry?

The cost of acquiring brand-new medical equipment is often too great for medical institutions to shoulder, even with financing options for direct purchases. Fortunately, there is a sound alternative for small hospitals and practices that need medical equipment but have limited capital resources and cannot afford to buy them: healthcare equipment leasing.

Buying equipment offers benefits like warranty privileges, post-sales services, access to new technology, and insurance claims perks. But while it is understandable for an institution to aim for equipment ownership, there are situations when renting is the wiser choice.

Here are a few of the times when renting might just benefit medical practices and hospitals more:

When Hospitals Want to Raise the Quality of Their Healthcare Services with New Equipment but Have a Limited Budget

Hospitals are duty-bound to provide the best possible services to their patients. Part of that responsibility is to obtain modern, high-quality, and high-performing medical equipment.

The accuracy of diagnostic tests, timely discovery of results, and efficacy of the treatment are highly dependent on the reliability of medical tools and equipment, after all. If hospital revenues are insufficient and financing is still an expensive option, leasing is the best answer.

When Hospitals Need to Modernize & Take Advantage of the Latest Medical Equipment Technology While Keeping Costs Low

The upfront costs for medical equipment leasing are significantly less than the lump sum payment required for new equipment acquisitions. Monthly rental fees are also lower than loan repayment rates for direct-purchase medical equipment financing.

Moreover, renting saves practices and small hospitals from the double burden of paying for the maintenance and other scheduled services while paying off the equipment itself. Leasing is, therefore, more feasible if hospitals need to manage their cash flows and allocate liquid resources over a broad scope of needs (e.g., utilities, salaries, supplies, and operational costs).

When Hospitals Want to Protect Their Financial Health from Potential Losses by Upgrading Old & Obsolete Medical Equipment

Medical technology evolves, and its pace keeps getting faster. A brand-new piece of equipment today could be considered outdated in just two or three years. If a hospital buys it, the institution may be forced to maximize and keep using the equipment even though newer and more efficient versions are available, which, in effect, can also limit the medical personnel’s ability to provide top-notch healthcare services.

However, when your leased equipment begins to deteriorate or if new technology becomes available, hospitals can switch to newer equipment without suffering massive financial losses through their medical equipment leasing.

When Hospitals Need the Flexibility to Grow & Improve Their Practice & Their Medical Equipment Over Time

The affordability of leasing equipment and paying only for the duration of their use makes it easier for hospitals to scale and upgrade according to their need and financial capacity. This can help bottom lines, clients care, and credit availability all while helping practices grow and succeed.

When Hospitals Aim to Own Medical Equipment at a More Affordable or Staggered Payment Plan

This is one of the perks that lessors offer to customers in the medical field and a benefit that medical institutions can take advantage of. There are diagnostic and testing equipment, for example, with mature technologies or are ingrained in standardized workflows that it is unlikely for hospitals to change them soon.

Once the terms of the lease are fulfilled (e.g., the institution has rented the equipment for x number of years without violating agreement rules), the hospital can gain full ownership and reap the returns on their investment.

Regents Capital is Here for Your Medical Equipment Needs

These scenarios are all good reasons to lease medical equipment instead of purchasing them. If you need more information to support your medical practices’ financial decision on leasing or owning, Regents Capital would be happy to help!

Get in touch with our team and find out how our services can benefit your institution today!

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