What Types of Assets Can Be Financed in a Business?
Business financing is an option available to professionals in many different types of niche – from farmers and office managers, right through to medical practitioners and gym owners. The varied loans made available by lending companies allows borrowers to focus on applying for the most relevant type of financing for their needs, but what can be financed in your business in the first place and are there any restrictions?
Things that can be financed (purchased with cash support from a lender)
Most lenders will offer specific types of lending options such as:
- Gym equipment loans
- Farm equipment loans
- Office equipment loans
- Medical equipment loans
- Miscellaneous loans
As their names might suggest; equipment relating to particular fields can often be purchased using the funds from a loan. Some lenders might want specific information on what it is that the borrower is planning on purchasing, while others may be a little more open and flexible and will simply extend the cash sum and then permit the applicant to buy the equipment that they need.
It’s important to note that if repayments aren’t kept on top of, any purchased items and other collateral goods may be reclaimed by your lender – so try to work with a broker to ensure that your terms are as flexible and convenient to your finances as possible.
Generally speaking however, office furniture, vehicles, assets like laptops and electronic devices and medical and gym equipment can be purchased without concern.
Things that can’t be financed
There are some things that certain equipment loans can’t be used to finance however, and these include paying members of staff, taking a bonus before the festive period and other ‘loose’ spending activities. There are loans that can be taken out to cover these types of expenses, but when it comes to equipment financing – the cash should predominantly be used to cover the cost of physical assets as mentioned above.