Unique Ways To Find Direct Funding For Your Business
If you run a business smaller than those that can be considered a large corporation, chances are at some time or the other you will have had trouble finding the money you needed to operate. You could have needed the money for any valid reason; perhaps equipment funding but you found it impossible to acquire the financing you needed, especially from the larger banks. One solution for small to medium businesses caught in this dilemma may be direct funding and this may be easier to come by than you might think.
Want to more how direct funding through leasing can help your business grow? All of us at Sun South Leasing are driven to aid you in your success. Call us today and see how we can help you.
What is Direct Funding?
This method of financing refers, in one way, to getting the funds you need to lease or purchase items to run your business directly from the vendor or dealer where you will be making your purchase. This is usually done through leasing agents or equipment rental outfits that specialize in providing the equipment small to medium businesses will need to operate successfully, and are able to secure this equipment in quantities that will allow them to lease out their inventory without having to hit their customers with an excess amount of interest to make ends meet.
You can always get another form of direct or small funding, known as a line of credit. These are usually obtained from a bank or financial lender and if your business has a sterling credit report, this may be the option for you. A line of credit is set up like a checking account, with only a limited amount of money available at any time. Interest is only charged on any amount you withdraw from the account but if you intend to use it to make a lot of purchases for your business it can get expensive with such a fluctuating rate of interest.
Is Leasing for Business a Better Deal?
For some businesses, it can be. Unlike a direct loan or line of credit, the interest rate you pay on the lease, if any, is locked in and is made a part of the monthly rental fee. Small businesses starting out often run into trouble with loan financing or lines of credit because they do not realize that the amount of interest they are paying has variable rates set down by the financial institution.
Leasing as direct funding saves money in the long run. You get a lease on the equipment you need at fair market value, broken down over time. If you no longer need the equipment, you bring it back and the lease is over. For long-term leasing for business, it also covers maintenance of the equipment, upgrades in the case of software leasing and electronics and no depreciation accounted for at the end of the year.