Management

Equipment financing in Kenya

Leasing is one of the best ways to obtain equipment finance.

Updated on

January 10, 2020

housing loans — Houses in major towns are more likely to be covered by most financiers. PHOTO | FILE

Equipment financing gives your business the construction equipment it needs in order to operate successfully and make a profit.

Leasing is one of the best ways to obtain equipment finance. A lease is good for businesses because it does not tie up money.

Construction equipment finance through a lease is attractive to businesses because they do not need huge amounts of collateral so as to get approved.

Here are some of the most common options of equipment financing:

1.) Equipment Loan – This is a loan obtained using the equipment as collateral. Excellent operating history, credit rating, debt ratios are the most important considerations.

2.) Equipment Leasing – This is a contract for a fixed period of time in exchange for payments, usually in the form of rent for equipment. This type of financing has lower credit requirements.

3.) Municipal Equipment Leasing – This is a lease transaction with any government agency, such as a City or County.

4.) Equipment Sale and Leaseback – This is the sale of an asset for cash, with a contract to lease the asset back from the funding source purchasing the asset.