Equipment financing can be confusing if you’re doing it for the first time. At Custom Truck One Source, we not only help customers find the right vocational truck equipment, rentals, OEM parts, etc., but we also offer a wide range of flexible and easy-to-use leasing and financing solutions as part of our standard offerings. We often find that people struggle with the financing `jargon’ when making acquisition decisions relating to trucking equipment needed to grow their business.
Financing equipment with Custom Truck Capital gives you flexible equipment acquisition solutions with various impactful benefits – such as 100% financing, lowest monthly costs, flexible payment structures, maximization of tax benefits, and so much more!
Equipment Financing
This term means that you acquire a vocational truck or any other heavy equipment with funds borrowed from a lender. The equipment will be purchased in your name, and you will pay off the lender according to previously agreed-on terms. When the loan is paid off, you will own the equipment outright.
Equipment Leasing
Unlike the above scenario, the equipment isn’t acquired in your name when you’re leasing. The lender is the title holder, and you pay an agreed-upon amount each month for its use. Leasing allows for the following:
- Low monthly payments
- Keeps fleet young and in good condition while managing long-term repair costs and down time
- Use of tax benefits when you may not be in a position to use them
- Ease of return of assets and end of term or renewal period
- Purchase options
Lease-To-Own
A lease-to-own agreement has a clear and definite end goal. You’re paying the lender to own the equipment at the end of the term. During this pay-off period you don’t have ownership but right-of-use. An end-of-lease balloon payment, typically is 10%-20% of the original equipment cost, allows for transfer of title and ownership.
Flexible Financing
Flexible financing allows us to customize a structure to suit your economic and business goals best. They may be related to cash flow, accounting, tax or asset ownership and depreciation. Here are some of the more common structures:
Deferred Payment Plan:
A buy-now-pay-later kind of agreement. You can defer payment for some time, subject to approval, and let the equipment work for you before you start paying for it.
No Money Down:
This is 100% financing, so you can keep your cash supply in optimal flow without making a down payment on the equipment you want to acquire.
Skip Payment:
In certain situations, a lender will agree to let you `skip’ a payment during initial or slow months, according to pre-approved conditions. This may also include a Seasonal payment structure if your business cash flow is uneven throughout the year.
Step Payment:
In a step payment agreement, you gradually increase the money you pay back as the lease matures. This gives you time to use the equipment and earn some cash before you have to budget for a larger payback amount every month.
Seasonal Payment:
If your business is seasonal by nature or geography, we may be able to offer lower payments when business is slow to align with your cash flow seasonality.
Term Length
A term length simply refers to the period of time your financial plan will last. It could be 36-72 months—or longer or shorter, depending on your unique needs.
If you have more questions or need financing help, contact us by clicking here or calling 844-282-1838.