Equipment finance can be either a lease agreement between the equipment manufacturer and the business. Generally, high cost assets are taken on lease.
It can also be a type of loan taken to avail assets such as vehicles or computers. Equipment finance is given on the entire purchase price of the asset and the repayments consist of a portion of the purchase price plus the interest.
These business loans are long term loans given to acquire fixed assets like land, building, heavy machinery, or acquire parts to build assets. These loans are repaid over long tenures i.e. 15 years or 20 years.
Most businesses own current accounts with banks to help them with additional liquidity in their day to day operations. Overdraft facility can help the business withdraw additional funds from the bank without paying a high cost on it. The interest on overdraft is charged only on the amount by which the account is overdrawn.
Lenders give out cash credit finance to businesses that hypothecate their inventory. This type of funding is given based on the value of the inventory secured.
This type of business finance is given by specific lenders who provide finance based on the value of debtors appearing in a business’s balance sheet. The invoice value less interest is provided to the business and the factoring agency collects the debtors instead of the business.
This is the finance extended by lenders to importers and exporters. This includes financing for export purchase orders, letter of credit and bank guarantee for payments among others. Trade finance is a vast network of different lenders working together in international trade.
Working capital loans are a type of business finance given by lenders for the day to day operations of the business. These loans are short term and temporary loans.
It is possible to apply for a business loan online directly through the lender’s website these days. To apply, you just need to fill up a form and a customer care executive from the lender will contact you for further procedures.