Details on Used Equipment Financing for Those with Bad Credit
If you have a bad credit score, depending on exactly how bad it is, a piece of equipment’s age often will not have a huge impact on the rate of interest. This is because if you have bad credit, the rates you will pay to lease or finance used equipment would drag in a vast amount of risk.
If you are neither an ‘A+’ borrower nor a ‘D-‘ borrower, but fall somewhere in between, then the rates of interest you pay will perhaps be slightly higher, but would not have a big impact on your loan payments.
Is There Any Other Impact When You Finance a Piece of Used Equipment?
The age of equipment will have an impact on the taxes. The older the piece, the less possible it is for you to do an equipment lease – oftentimes, a company will only be willing to offer equipment financing as a loan (which means you own the piece in the end for a one dollar buyout, as against some balloon payment).
If you do a used equipment financing/loan instead of a lease, then you will lose the chance to write off your payments as a total operating expense. This can have an impact at times, but most of the time, when customers buy used equipment, cost savings of purchasing used versus new items is so great the difference in cost more than offsets difference in taxation or financing charges.