An typical equipment loan uses equipment owned by the business as collateral. For example, you may need a loan of $500,000.00 in order to expand your business and your business may already own over $900,000.00 worth of equipment which you currently utilized for transportation, manufacturing, etc. It may be possible for you to get the loan you need by using the equipment which you already own as collateral. Equipment loans help business owners get the money they need without all of the usual paperwork and requirements of more traditional business loans. This means no credit history, no profit and loss statements, none of the hassle and red tape that can slow down or prevent other types of loans from being approved.
Sometimes you can even purchase new equipment and use that very same equipment as collateral. Similar to an auto loan, if you fail to make payments on the equipment it will simply be repossessed. This type of loan allows business owners to avoid putting personal assets at risk. Startups and businesses without assets can take advantage of this type of equipment loan as well.