Monthly Payments Are Best – Literally.

By | June 22, 2020

A lot of times when we discuss equipment financing in print, or even face to face, we’ll sometimes use the phrase “monthly payments” as a substitution for the word “financing”. 

best monthly payment choice

For example, I’ll write a blog post on vendors offering financing, and now and again, I’ll slip in “offering monthly payments is a great way to increase sales”. So used in that context, “monthly payments” actually means “financing”. We do that so we don’t use the same words over and over.

But today, I want to remind you about monthly payments in the literal sense. As in “making a payment every month”. Because monthly payments are better than any other type of financing.

I feel the need to say this, because in recent years, there have been alternatives to monthly payments offered in the equipment financing world – bi-weekly payments, weekly payments, and even DAILY payments. And to me, none of them are as good as monthly payments. 

A lot of these types of structures are used to provide financing for companies with less than stellar credit. Because using daily, weekly (et al) payments allow a lender to charge an extraordinary interest rate, but it’s not apparent. In fact, many of them will even say there is no interest rate, just a fee. And even if it is calculated interest, it’s really hard to figure out (and will seem small – daily payments do that). But many of these daily payment (etc.) structures can end up with an equivalent interest rate (or fee) that approaches three figures, percentage-wise. Yikes.

I know I am being a bit ambiguous. This is because I do not want to highlight any particular company, business practice, or loan structure. I don’t want to slam competitors. In the end, we do us, and they can do them. 

But, and this my/Crest Capital’s opinion: if it’s anything but monthly payments, keep a very critical eye on it. 

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