The problem with buying equipment from cash flow
Equipment is the purchase that most often drains a working account. An oven, a lift, a skid steer, a van, a dental chair or a commercial mixer might serve a business for years, but it asks for payment on delivery. Pay from cash and you may leave payroll thin for a quarter. Wait and you lose the revenue the equipment would have brought.
Matching the repayment to the life of the asset is the idea behind equipment financing. The machine itself is part of the picture of why the funding makes sense.
What Elk Grove businesses buy
Wikipedia describes Elk Grove as a place with many wineries, wine cellars and vineyards, and its history is rooted in agriculture: wheat, barley, fruit, nuts, cattle and sheep on Gold Rush-era ranches. Today's economy is broader. It includes retail, schools, restaurants and the trades that serve a growing suburb. Typical equipment purchases include:
- Tanks, presses, bottling or cold-storage equipment for a tasting room or small producer.
- Trailers, mowers and compact machinery for landscape and grading crews.
- Ovens, hoods and refrigeration for restaurants and bakeries.
- Chairs, lasers and treatment equipment for salons and clinics.
Choosing between new, used and leased
- New costs more up front, but warranty and expected life may justify it for equipment running every day.
- Used lowers the purchase price. Have it inspected, and get service records for anything mechanical.
- Leased keeps the payment lower and suits items that go out of date quickly. You usually do not own it at the end unless the agreement says so.
Whichever path you take, get the final all-in price in writing, including delivery, installation and training.
A payback test you can run in ten minutes
For illustration only: suppose a catering business in Elk Grove can add $3,000 of monthly gross profit with a second refrigerated van, and the van costs $2,000 a month to finance and run. The van adds $1,000 a month of margin and a lot of risk if bookings dip. If instead the van adds $6,000, the cushion is much wider. The point is to compare the asset's added profit with its added cost before you sign. These figures are examples, not our terms.
How to apply with us
We offer funding from $25,000 to $5,000,000, funded in as little as 24 hours. A FICO of 500 or above is considered, we review about three months of business bank statements, and there are no tax returns required. The application takes five minutes with a soft credit pull, and sole proprietors can apply. If you need breathing room for more than equipment, compare working capital or a business line of credit. Start on the application page, or read the Sacramento County overview.