When Bill Gates envisioned every home having a personal computer, he must have known just how useful computers would be in the future. After all, it has become almost impossible for people to live without computers. Businesses cannot run without computers and most communication is based around computers. If you are a business owner, you will need numerous computers to do business effectively. For starters, you will need computers at different points of sale. At least one more computer will be required at the main office and several others in each office within the business premise. Since you may need to take work home with you, you will need a powerful business laptop computer as well as high-spec computer servers to store company data and enable remote access to your computer systems. Since acquiring all these computers can be costly, be sure to visit ELO – computer finance to get the best deals for Your IT Equipment.
Computer Financing Options
A number of business computer financing options exist. Each option is suitable for different types of businesses. The options available to established businesses with a great history may not be available to startups with little or no history at all. Below are some of the most common computer financing options available to businesses:
i) Hire Purchase
Depending on the types of computers you want to acquire as well as the number of computers required, you can consider acquiring them on hire purchase. As the name suggests, you will be required to pay a deposit to secure the computers and pay lease fees regularly as agreed with the equipment leasing company. Please note that the computers may be in your possession, and you can use them as you wish, but they belong to the equipment leasing company. This means that if you fail to pay the lease fee, the leasing company will take possession of the computers, and you will lose both the huge deposit you paid and the payments you made. The deposit required for hire purchase agreements is usually around 40%. That said, hire purchase may be the only option for startups and businesses with bad credit.
ii) Secured Business Loans
If you have equipment, plant, machinery, or vehicles owned by your business, you can take a secured business loan to buy the IT equipment you want. The value of the assets used as collateral for the business loan must be equal to or higher than the value of the business loan you are applying for. Please note that if you fail to service your loan accordingly, the assets used as collateral will be repossessed by the lender. These assets will have to be auctioned off to recover the outstanding balance and legal fees among other things.
iii) Unsecured Business Loans
If the business is already running and you have a reliable income stream, you can take out an unsecured business loan based on the revenue generated by your business. The loan can be used to purchase the equipment you require. Unsecured business loans are not secured, so if you default, only your business accounts will be attached. The lender may also initiate bankruptcy proceedings to recover their debts if you default. This will have an adverse effect on your credit rating.
iv) Equipment Finance
The best funding option for businesses that want to acquire high-quality IT equipment is equipment financing. Computer equipment can be costly to procure, but there are many firms that can finance the purchase. When looking for the best equipment financier, there are several key factors to be taken into consideration. They include deposit required, interest rate charged, repayment period, processing fees, processing speed and loan amounts among others.
With equipment financing, the IT equipment you acquire act as collateral for the loan. In case you fail to service the loan according to the agreed terms and conditions, this equipment will be repossessed and liquidated to recover the outstanding balance. Since computer equipment can be damaged or get stolen, they must be insured effectively to ensure the financier does not suffer any loss in case of theft or damage.
Choosing the Right Financier
Since there are many financial institutions that may be willing to finance the purchase, you should carry out some background research before deciding to make a decision. Below are key factors to take into consideration during the search:
1. Interest Rates
The rate of interest charged by different financiers must be compared. This is because you want the most affordable equipment financing loans. The ideal lender should not only charge the lowest rate of interest, but also offer a fixed rate loan. After all, you want the most affordable computer finance.
2. Deposit Required
The deposit or down payment required by different financiers must be compared. This is because you want an affordable loan. If a financier wants at least 20% down payment, but you can only afford 5% deposit, you should look for a different financier who can accommodate your needs. Please note that the bigger the deposit you make, the lower the outstanding balance and interest payment will be.
Other factors to consider include processing speed, processing fees, reputation of the lender and the T&Cs offered by different lenders.
