How Does Used Equipment Financing Work Through a Bank?

September 27, 2024

Your business may need to replace outdated equipment or broken machinery, but new equipment can be quite expensive. Although buying used equipment should cost less than new equipment, the purchase can still significantly impact your company’s bottom line.

Instead of delaying a critical acquisition because of the cost – or utilizing cash reserves to buy pre-owned equipment and machinery – your business could secure an equipment loan that is designed to cover the purchase price less the required down-payment.

Discover how used equipment financing can benefit your business, the different lending options available, and why your company should choose Texas Gulf Bank for your business financing needs.

What is Equipment Financing?

If your business relies on specialized equipment or heavy machinery for daily operations, you need the flexibility to replace equipment when machines break down or become obsolete.

With equipment financing, your business may gain access to cost-effective funding solutions to secure newer, more efficient equipment to cover your day-to-day needs.

Many different industries can benefit from used equipment financing, including:

Construction
Industrial manufacturing
Oil & gas
Production
Transportation
Warehouse
Healthcare

Financing options may be available for used equipment such as demo units, refurbished equipment, or trade-in equipment transactions–whether previously owned by a private party or by a retail establishment.

Your business should not have to sacrifice progress and growth opportunities because of a lack of funding for equipment needs. Texas Gulf Bank can help with strategic lending options that cover your machinery and equipment costs.

Equipment Financing: Enjoy a Range of Benefits

When you choose to finance your equipment over time instead of making a large, lump sum purchase, this decision may provide your business with significant benefits. These include:

Flexible financing that meets specific business needs
Access to newer technology to spark innovation and business improvements
Productivity gains that may help eliminate waste and inefficiencies
Potential to improve cash flow and build business credit history
Ability to spread equipment costs over time with manageable monthly payments
Expansion opportunities to acquire larger clients and bigger projects

By financing equipment through Texas Gulf Bank, your company may be able to take advantage of growth opportunities and be better positioned for long-term success.

Which Lending Option Is Best for Your Business?

Texas Gulf Bank has proudly supported small business growth throughout the Southeast Texas Gulf Coast region for over 110 years, primarily by offering a range of strategic lending options that are designed to fuel growth.

Each of our financing options can help you secure the preowned equipment and machinery you need without sacrificing financial stability or future growth.

Equipment Loans

An equipment loan is a small business loan specifically designed for buying used machinery or equipment. These loans often come with fixed interest rates and can vary in length depending on the expected longevity of the machine or equipment.

These loans enable you to secure equipment using the equipment itself as collateral. If approved, your business receives a lump sum payment to cover the cost of the used equipment purchase (less the required down payment). Then, your company’s monthly loan re-payments are spread out over time.

SBA Loans

For small businesses in Texas, you may qualify for an SBA 504 loan through the Small Business Administration (SBA). SBA 504 loans can be used to acquire fixed assets, such as used equipment.

Specifically, you can use funds to finance the purchase of long-term machinery and equipment with a useful remaining life of a minimum of 10 years. As long as you operate an eligible business as defined by the SBA and the used equipment fits the requirements outlined by the SBA, you may be able to receive financing support.

Texas Gulf Bank has helped countless small business owners across the region obtain financing through the SBA to meet their latest business needs. Our SBA loan specialist can help determine whether this type of loan is the right fit for your company.

Experience A Straightforward Loan Process

Whether your business is upgrading products and services, pursuing larger clients and projects, or simply needs functional, reliable equipment and machines, Texas Gulf Bank can help. We offer a seamless, streamlined loan application process that may enable you to secure used equipment needed to fuel growth.

Our relationship-based bank stands out because we provide exceptional client service – and this starts with our application process. Our local lenders will start with an initial consultation to discuss your business goals, equipment needs, the financial health of the business, and available loan options.

As part of the loan application, your business may need to submit business documentation including, but not limited to:

Completed loan application
3 most recent years of Business financial statements and tax returns
3 most recent years of Personal financial statements and tax returns from guarantor(s)
Equipment pricing and information for each piece of used equipment
Income and cash flow projections
Detailed business plan
Schedule of outstanding business debts

As a local bank, our in-house loan review team promptly reviews all loan applications. If approved, we will make loan funds available so you can secure the equipment needed.

Reach Out To Start The Used Equipment Financing Process

As a strong supporter of Texas businesses with strategic lending options and banking services, Texas Gulf Bank is the financing partner you need on your side. If you’re looking to find a lender to support your equipment needs, you can rely on our team to provide tailored support.

Contact our loan officers today to learn more about used equipment financing and how we can support your growth initiatives and business needs.

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All loans subject to credit approval