When it comes to industrial equipment financing, salespeople will tell you exactly what you want to hear. They will tell you “0% down,” or “We can get you financed with bad or no credit.” In reality, yes, they probably can but it all comes at a cost. Let’s take a look at the lies that industrial equipment finance companies will tell you to get the deal.
Financing companies will often say, “Get your industrial equipment with 0% down!”. This sounds good on the surface but it comes with some added dangers. Think about it for a second, if you purchase industrial equipment with 0% down, you have no skin in the game. The financing company can hit you with hefty monthly payments that are stretched out for a long term. What can happen during this lengthy term? The equipment can and will depreciate, leaving you with an outdated piece of equipment that you will still be making payments for. It is a win for the financing company since you have made your payments.
Financing from the Manufacturer
You may have seen “financing from the manufacturer” and/or “the best rates and terms” before. In reality, when you walk through those doors to begin your negotiations, the financing salesman will say, “I’m sorry, you do not qualify for financing through the manufacturer, however…” This is classic bait and switch, they will say and do just enough to entice you and gain interest. Once you are there, they will show you alternative financing options. These terms are usually a lot higher than you expected. Contact the manufacturer first to see what financing options are available.
The Fine Print
Make sure to read the fine print of your contract. There are a lot of companies that hope you will not read the entire contract. They will hide clauses that state that you must notify them between such and such date for your payment and if you do not, then they may demand payment in full. Another section in the fine print that is overlooked is the servicing of your equipment. The fine print may say that the finance company can sell your equipment to other services. This can change the rate and terms of your equipment. Read and do your due diligence before signing.
Financing for Everyone
Some companies say that they can get you financing if you have had bankruptcies, tax liens, judgments, repossessions, etc. They say that they can get you financed but it comes at a cost. You will have to pay in the form of higher interest rates, higher monthly payments, and less than desirable payment options (e.g. weekly or semi-weekly payments). You may still be able to obtain that crucial piece of industrial equipment but it will come at a cost.
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