What is an Equipment Loan and How Can It Benefit Your Business?

If your business needs to purchase or lease equipment, an equipment loan can provide a flexible and cost-effective way to finance the necessary toolsto grow. Whether you want  to acquire machinery, office equipment, or medical devices, equipment loans offer a convenient way to spread the cost, maintain cash flow, and budget more effectively.

Through partnerships with local credit unions, CBS, with its Creditable platform, helps facilitate these loans for small and large businesses, ensuring that credit unions can offer competitive and streamlined financing solutions to their members. Let’s explore how equipment loans work and how they can benefit businesses and the credit unions  serving them.

What is an Equipment Loan?

An equipment loan allows businesses to borrow money to purchase or lease essential equipment, with the equipment itself serving as collateral. This type of financing is ideal for businesses that need costly machinery, tools, or office supplies but want to avoid large upfront payments.

Key features of an equipment loan include:

• Collateralized by Equipment: The equipment purchased acts as collateral, reducing the lender's risk.
• Fixed Interest Rates: Many business equipment loans come with fixed interest rates, offering predictability and ease of budgeting.
• Spreads the Cost Over Time: Rather than depleting cash reserves, an equipment loan enables businesses to spread the cost over time, maintaining cash flow for other expenses.

Credit Unions’ Role: CBS partners with credit unions to offer tailored equipment loan solutions, enabling them to provide competitive financing options to their members with minimal risk, thanks to the collateralized nature of the loan.

External Link: To learn more about how collateral can benefit small business loans, visit the Small Business Administration (SBA) for detailed information.

Internal Link: Check out our guide on understanding collateral and secured business loans for more insights on how equipment loans are secured by assets.

Examples of Equipment That Can Be Financed

Various types of equipment across industries can be financed through equipment loans. This allows businesses to acquire the necessary tools and machinery they need to operate and grow efficiently.

Some examples of equipment that can be financed include:

• Office Furniture and Computers: Essential for setting up or expanding office spaces.
• Heavy Equipment: For construction and manufacturing industries, including excavators, cranes, etc. 
• Medical Equipment: Doctor’s offices can finance diagnostic tools, MRI machines, or other advanced medical equipment. Learn more about financing options for medical equipment at the American Association for Medical Equipment.

Whether your business is in healthcare, manufacturing, or any other industry, heavy equipment loans and other financing options can help you acquire the assets you need to succeed.

Credit Unions’ Role: Credit unions can rely on CBS’s Creditable platform to help streamline the loan process for their members, making it easy to finance equipment regardless of the industry.

How Equipment Loans Benefit Your Business

An equipment loan provides several key benefits that help businesses maintain financial stability while investing in their operations:

• Improved Cash Flow: Equipment loans spread the cost over time, allowing businesses to manage cash flow more effectively while continuing to invest in growth.
• Predictable Budgeting: With fixed interest rates and repayment terms, businesses can easily plan their finances.
• Growth and Expansion: Small business equipment loans allow companies to expand their operations by acquiring essential tools without a significant upfront investment.
• Startups and Established Businesses Alike: Even new businesses can access equipment loans for startup businesses, helping them scale quickly.

Credit Unions’ Role: Credit unions offering these loans through CBS’s Creditable platform can help businesses access financing faster and with less red tape than traditional commercial loans, allowing them to play a critical role in their local business community's growth.

How to Obtain an Equipment Loan

Securing an equipment loan doesn’t need to be a lengthy or complicated process. With CBS’s Creditable platform, businesses can obtain equipment loans for small businesses through their local credit union in far less time than it takes to secure a traditional commercial loan.

Key advantages of getting an equipment loan through Creditable:

• Faster Loan Approval: Equipment loans processed through Creditable are approved much quicker than traditional commercial loans.
• Available for Startups: New businesses can access equipment loans for startup businesses, which provide the capital they need to hit the ground running.
• Loans for All Industries: From medical equipment loans to industrial machinery, CBS helps credit unions offer flexible financing solutions that benefit businesses of all types.

Credit Unions’ Role: Partnering with CBS allows credit unions to expand their service offerings and efficiently provide equipment loans to members across various  industries.

 Check out this National Credit Union Association (NCUA) resource to learn more about financing options.

How CBS Supports Credit Unions in Offering Equipment Loans

CBS facilitates equipment loans for businesses and acts as a strategic partner for credit unions. By offering the Creditable platform, CBS provides credit unions with the tools to streamline loan applications, underwriting, and approvals, ensuring their members can quickly access the funds they need.

With CBS’s expertise, credit unions can:

• Offer Competitive Loans: Equipment loans available through Creditable help credit unions offer competitive rates and terms.
• Serve a Wider Audience: With loans available across industries, credit unions can grow their member base by serving a diverse group of businesses.
• Increase Member Satisfaction: Faster loan processing and flexible options help credit unions retain and attract more members by meeting their financial needs.

Conclusion

An equipment loan is a powerful tool for businesses  investing in necessary equipment while maintaining financial stability. Through partnerships with CBS and the Creditable platform, credit unions can easily offer these loans to their members , providing tailored, competitive options that benefit both businesses and financial institutions.

Whether your business needs office furniture, industrial machinery, or medical equipment, financing through equipment loans helps you spread costs, manage cash flow, and plan for growth. And for credit unions, partnering with CBS provides the expertise and platform to offer these loans quickly and efficiently.