I was getting my oil changed the other day, and started thinking about “maintenance”, as in regular maintenance for my car (because, of course, that’s exactly what an oil change is).
Then, since I’m Fletch, my mind wanders to equipment financing, and regular maintenance on purchased equipment. And it occurred to me that I don’t speak about maintenance agreements and things like that nearly enough. Because one of the advantages of equipment financing is the fact that a good equipment financing company (like mine) will not only finance equipment, but also finance what are called “soft costs”, like a maintenance agreement.
Oh, I’ve mentioned soft cost financing from time to time, and maybe even had a post about it, but this time, I’m going to do a little series on financing soft costs along with equipment, because it deserves some time in the sun. In future posts, I’ll highlight a popular soft cost that can get financed, and discuss it a little. Because I’m certain there are people out there who are unaware that you can not only finance, say, a baling machine, but you can also finance delivery, setup, training, the tax, a maintenance agreement, and more.
But we’ll look at all of those later – for now, let’s discuss the very idea of soft costs, and why financing them is a great reason to choose an equipment financing company.
If you read here often, you know all the ways an equipment finance company can beat the bank. And one of those reasons is an equipment finance company will finance 100% of the equipment, PLUS soft costs. A bank will typically only finance 80%, and NO soft costs. This means you are not only on the hook for the unfinanced 20%, but if you want anything extra (like perhaps a few training sessions for that complicated machine), well, that comes right out of your pocket too.
But the friendly equipment financing company will not only finance 100% of your equipment, they can finance the soft costs as well. So yes, go get the training and the maintenance agreement, because they make perfect sense. Hey, we want you to be as successful as possible, and if we can help by financing the training (et al) to go along with the machine, we will.
Soft costs financing is a good thing, and it’s something you should definitely consider the next time you finance or lease equipment.