Your Guide to Equipment Financing
Updated: Jan 23
Is this alternative source of funding the right option for your organization?
When cash flow is tight, investments in new technology or equipment are needed, or organizations simply want to save time and money, equipment financing is a smart alternative or complementary funding source. But what exactly is equipment financing and how does it stack up against more traditional forms of funding? We offer an overview below, and if you’re ready to discuss your specific needs, you can schedule a consultation with one of our leasing experts now.
First things first: Who should consider equipment financing?
Organizations, ranging from the earliest startups to the most established enterprises can benefit from equipment financing, regardless the age, size and liquidity of the business. For example, startups who are raising equity can use equipment financing to build out a facility to advance progress on their product. Middle market organizations can preserve their cash for activities that drive sales. And large enterprises can streamline and reduce costs on a major tech refresh.
So, if yours is a business that requires large investments in equipment or technology, equipment financing is likely a solid financial option for you.
What is equipment financing exactly?
In the simplest of terms, equipment financing is the process of spreading payments over a longer term on business-critical assets, instead of purchasing expensive equipment upfront and paying one lump sum. The benefits are significant:
Preserved capital. You can conserve equity capital for growth, product development, key hires and other ROI activities, instead of depreciating assets.
Cash flow management. More affordable, predictable payments free cash and credit lines for other operating needs.
Low-cost and flexible. Some equipment financers offer a lower cost form of capital when compared to venture capital and private equity. And the best ones will enable you to modify your lease as needed or offer options as the lease matures.
Retained equity. Again, some equipment financers offer non-dilutive funding, absent of warrants, covenants and other equity dilutive components that require you to give up shares of your business.
Growth. Equipment financing can drive productivity, enhance scalability, and enable your organization to reach milestones sooner because the cash you do have is focused on growing the business.
How does it work?
While every company is different, at CSC Leasing, we pride ourselves on offering a much easier, less onerous process than traditional equity fundraising and bank debt. In fact, we can often get you your money in weeks, instead of months.
Top equipment financers will work with you to get a handle on your company and equipment needs. Then conduct due diligence to fully understand the financial scope of your business, including where you are, where you are headed, and the associated risks of providing funding. Then, finally, present options that work for you. For example, at CSC, we can either offer funding on an asset-by-asset basis or offer a lease line that you can draw upon over a set term. We also offer a sales leaseback, where we buy equipment you’ve purchased from you and lease it back to you, to inject some cash into your business or free up headroom.
Terms can range from 30 to 48 months, and are largely contingent on a company’s maturity, financial performance and capitalization or liquidity, as are the options available at the end of the lease.
Ready to learn more about equipment financing?
CSC Leasing supports inventive, well-run companies — even when they face challenges or setbacks. If you need to increase your cash flow or improve your cash management, CSC Leasing may be able to help. Schedule a complimentary consultation now.
About CSC Leasing Company
CSC Leasing Company maintains a successful 35-year track record working with organizations of all
sizes and stages, providing a low-cost, non-dilutive form of capital for procuring equipment. With nearly $1 billion in transactions financed, CSC Leasing offers an agile and flexible approach with the transparency, speed and service of a family-owned business. Learn more at www.cscleasing.com.