A food processing loan provides funds necessary to acquire food processing equipment. This loan is a long-term loan to fund the capital equipment being purchased with the food processing loan. The equipment purchased with the loan will lose value and depreciate over time. This depreciation allows the food processing company to write off the loan’s cost over the length of the loan’s terms.
Depreciating a Die Cutting Loan
The period of time in which a food processing loan may be set is based on how long the purchased food processing equipment will be used. A food processing business uses a depreciation schedule over the usable life or time the equipment will be used. This allows the food processing company to recover its interest costs that are associated with the purchase or financing of the food processing equipment. The food processing company can write-off and deduct the cost of the loan over time.
Food Processing Interest Rates
The interest rate that a food processing loan borrower pays will be based on the businesses credit rating. This interest rate will be stated in the loan agreement. The loan agreement is the legal understanding between the borrower and the lender. A good credit risk with a high credit score benefits from receiving a better interest rate than a food processing loan borrower with bad credit. A food processing loan borrower looking for a food processing loan should consult with a lender to determine their qualification for a food processing loan.
Some important items to know to finance your are:
- How much money do you really need?
- Do you know your exact FICO scores?
- How do you plan to repay the loan?
- Who is going to borrow the money? You personally or another legal entity?
- What assets can you pledge to secure your loan?
Make sure you know you are pre-qualified before you apply. Our free business capital search engine will allow you to see the funding programs and lenders that are available to you and then you choose those you wish to apply for.