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How to Find the Right Lender

Before you look for a lender

Unlike buying a house or car, there is only one reason to buy equipment. To generate profit for the owners. First things first; you need to decide on how acquiring the equipment will help you to better manage the business and what is important to you. We ask these kinds of questions to help our customers determine their priorities:

  • Does renting make more sense than owning?
  • Do you care more about working capital or cash flow?
  • Is there potential for early payoff?

After you decide on what is important to your business, it’s best to start your search by shortlisting lenders that have experience working with your industry. This is especially important if your industry is prone to economic swings. Compare each lender’s cost of financing as opposed to just their interest rates.

Financial agreements can also be confusing and dangerous.

For example, can you spot the differences between a Finance, TRAC, or FMV lease? If not, you really should be talking to your accountant, legal advisor, and/or a commercial lending specialist before selecting a lease agreement, as it can cost you thousands of dollars and in some cases your business.

Collateral requirements are not all the same for every customer.

If you are not paying attention you could easily give up valuable bargaining chips, which can get you more favourable financing options.

Terms & conditions (T&C’s) are often overshadowed by the interest rate and collateral requirements. Buried in the pages of fine print are T&C’s that define everything you can and/or have to do over the term of the agreement.   For example, if in the future you decide you don’t need the equipment, can you sell it and pay off the debt? If so, do you know what the penalties are? They could be substantial. Did you know on some leases require you to file notice within 60 days of the last payment, and failure to do so means you could lose the equity you’ve built in the equipment. 

Lastly don’t get comfortable and complacent with the same lender, it’s always smart to make them work for your business.

At Camex, we are always prepared to work for your business. We look forward to getting you the financing that best fits your needs.

 

Jodi Laye, Finance Manager

Camex Equipment Sales & Rentals Inc.

Sept 5, 2018

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