When you need to expand operations, you'll need access to more commercial equipment. One way to acquire this is by purchasing more pieces of equipment. However, you may prefer to free capital up for other purposes. Fortunately, if you are an attractive borrower, you can obtain commercial equipment financing while also keeping your interest rates low.

Employment History

One of the factors determining whether you'll obtain a commercial equipment loan is your employment history. This will determine if you'll have the income necessary to be able to pay off the loan. 

Credit History

Your credit history and credit report will affect your ability to obtain a commercial equipment loan. If your credit score is not very great, there are ways you can work toward correcting the deficiencies in your credit score. A traditional lender is often less willing to extend credit to a borrower who has a small business and little or no credit. For example, if you had late payments on a past equipment loan or if you defaulted on an equipment loan, this may cause you to pose more of a risk. 

If you have not yet established a business credit score, you should obtain a business credit card. Then, make purchases using this card and pay them off in a timely manner. Some lenders may require that you have a business credit score before you are able to obtain a line of credit. However, a great personal credit score can also help you secure a loan.

Growth and Revenue

Your business growth and revenue will affect whether you'll qualify for an equipment loan. The lender will want evidence that you will generate enough of a profit to pay off the loan and make minimum payments. 

Business Plan

Have a solid business plan that is easy for the creditors to understand. For instance, you'll want to clarify how your business intends to generate a profit. You might start a landscaping business and intend to hire more staff and purchase more lawn mowers so you can meet greater demands.

The increased profits from servicing more customers would be used to pay off the loan. The plan does not have to include pages of detail, but it should be thorough. Fortunately, once you obtain a commercial equipment financing solution, the payments that you make will increase the odds that you'll be able to secure financing for more equipment in the future.