Even with the thousands of different loan products out there, equipment financing has long been a popular choice for small businesses.

That’s because small businesses are often part of industries that are reliant on equipment. And, as you probably know, that equipment isn’t cheap. Whether it’s a $10,000 oven, a $5,000 photocopier, or a $90,000 dump truck, it’ll always hit you hard in the wallet.

Because most small businesses deal with limited cash flow, it’s difficult to purchase a not-cheap piece of equipment no matter how crucial it is. To solve this conundrum, many turn to the various loan products available for the purpose of equipment financing. According to industry research, upwards of 80 percent of businesses choose the financing route when they need to make an equipment purchase.

Just as price tags vary on different pieces of equipment, so do the equipment financing amounts you can qualify for. On the low end, you’ll sometimes see loans of $5,000. For the largest purchases, the amounts can go all the way up to $5,000,000. The amount you qualify for will depend on the details of the equipment you’re purchasing, such as what its value will be in the long term and if it’s new or previously owned.

The interest rates for equipment financing can be quite favorable, starting in the neighborhood of 7.5 percent. As far as the terms go, they tend to fall somewhere between one and five years.

So there are the nuts and bolts of this method of financing. But what are the unique elements that really make it special? Here are 3 of the biggest benefits you’ll get when you use equipment financing for your small business:

1. It’s Easier to Obtain than Other Types of Financing

When small business owners take the traditional route of going to their local bank for a loan, it can be an extremely frustrating experience. Not only is it time-consuming, but banks reject 85 percent of loan applications. That path just isn’t a good use of your valuable time and resources.

With equipment financing, the odds of success go way up. First of all, the qualifications are more relaxed. As long as you’ve been in business for at least a year and bring in $50,000 or more in annual revenue, you’ll be a prime candidate. Lenders will also pay close attention to your credit score, but as long as it’s 650 or higher, you probably won’t need to worry.

One of the main ways equipment financing makes things easier for entrepreneurs is that collateral isn’t an issue. Rather than offering up your home or boat to the lender, you can use the equipment you are purchasing. As long as you make all of your payments as scheduled, the equipment is yours to keep. If you default on the loan, the lender might take possession of the equipment. But at least all your personal property would stay yours.

Plus, with the advent of online lending, you can visit a marketplace and find a loan option faster than ever.

“The trend to move online and mobile for small business equipment financing will continue to become more commonplace and eventually the norm,” says ForConstructionPros.com.“ As lenders and mobile technology become more aligned to service small business demands, this will further increase use cases and the adoption by small businesses. The generational shift in business ownership will further solidify online and mobile as core channels to securing equipment financing.

SEE ALSO: 3 Types of Collateral to Use for Small Business Loans

2. The Funding Is Fast

Some loans take up to three months to fund. So if a crucial piece of equipment were to break down, imagine how difficult it could be to endure 90 days without the money necessary to find a solution.

The geniuses who invented equipment financing knew that small business owners can’t sit around waiting for help. They need funding fast in these kinds of situations. Once your request is approved, you can often get the money by the next day.

Part of this expediency comes from the fact that the loan is more streamlined. Remember how you don’t need to put up your own collateral? Well, that condition helps to simplify the process. And because the qualifications are lower than with more exclusive financing options, there is less paperwork and fewer hoops to jump through.

3. You Can Use It for All Kinds of Equipment

When most people hear the word “equipment,” they think of things like forklifts and X-ray machines. However, the definition is actually much broader when it comes to equipment financing.

In the construction and industrial world, this method of financing is often used for large items like excavators, conveyor belts, trucks, backhoes, compressors, dump trucks, or hydraulic lifts. It could also help fund the purchase of solar panels on the roof of your office. Or a new credit card reader that lets you accept more forms of payment from customers, like Apple Pay or Google Pay.

In a restaurant, equipment financing could obviously help purchase refrigerators, blenders, ovens, and fryers. It can also be used for upgrading the tables in the dining room. Or new lighting. Or a restaurant point of sale system.

Whatever your industry, know that equipment financing is a versatile solution to your financing needs. Whether you need to update your technology with better computers, add comfier chairs to your waiting room, bolster your payment processing tools, or add new trucks to your fleet, equipment financing could be the vehicle that gets you there.

SEE ALSO: Need Funding For YourSmall Business? Check out ShopKeep Capital.

Equipment Financing and You

If your small business has equipment needs, take the time to review all your options. Perhaps a term loan or some other type of financing could be a viable way to achieve your objective. What’s important is that you survey the field before you narrow things down.

Ultimately, you may find that equipment financing is indeed right for you. It’s a laser-focused solution for entrepreneurs, so if your business has equipment-related needs, it could easily turn out to be the best way for you to make your dreams come true.

Grant Olsen Lendio

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.