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A forklift loan is made to forklift businesses that are in need of purchasing forklift equipment. This loan is specially designed to finance the cost of forklift equipment for a forklift business. This helps a forklift business engage in its business operations with the necessary equipment and supplies.
Special Purpose Loan
A forklift loan is a special purpose loan that is designed specifically to fund the purchase of a forklift. The terms and conditions of a forklift loan are based on this fact and structured in order for the borrower to accomplish their purchase. If a forklift business has other needs for related equipment, this can be accomplished with other types of forklift-related loans.
Types of Forklift Loans
A borrower of a forklift loan should have good credit and not be in default of any other types of loans. These loans are offered by private lenders such as banks and finance companies and are underwritten to ensure that the lender will be repaid in a reasonable period. A forklift loan may be for a few years or written as a declining balance loan (one that diminishes over time as the value of the equipment diminishes. A declining balance loan can be in place for as long as 25 or 30 years.
Secured Forklift Loans
Lenders may secure a forklift loan with the forklift that is purchased with the loan’s proceeds. This securitization of the loan protects the lender’s interest in the event that the borrower defaults on the loan. If a default were to occur, the lender may simply repossess the forklift that was purchased with the forklift loan and attempt to sell it in the open market.
Credit is the lifeblood of your business, especially for small or new startup companies. BusinessFinance.com assists entrepreneurs to get started purchasing equipment, building your inventory and expanding your business.
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?