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Wells Fargo no longer offers the Equipment Express loan as of May 2021. The servicing of current borrowers of these loans will continue as usual.
Wells Fargo equipment finance: Everything you need to know
With $10,000 to $100,000 loan amounts, 2 to 6 year terms, and rates starting at 7%, Wells Fargo equipment finance loans can assist you in making an investment in equipment.
A Wells Fargo equipment finance loan may be the best choice if you need to buy manufacturing equipment, commercial kitchen equipment for your restaurant, or vehicles for your sales team.
Additionally, Wells Fargo is among the best banks in the US for business loans. Learn more about Wells Fargo’s equipment financing options, including the costs, eligibility requirements, and application procedures. Learn all there is to know about these business loans so you can decide for yourself whether or not their offerings are right for your company.
What is an equipment finance loan?
Small business owners can obtain equipment, such as cars, trucks, kitchen appliances, heavy machinery, office furniture, and computers, without having to pay for it up front thanks to equipment finance loans. Terms typically last as long as the equipment’s expected lifespan, and interest rates range from 7% to 30%.
To finance the purchase of equipment, you don’t necessarily need to apply for a Wells Fargo equipment finance loan or any other equipment-specific loan product. The equipment could theoretically be bought with a short-term business loan, a Wells Fargo SBA loan, or another form of debt financing.
Nevertheless, obtaining equipment through a loan is frequently the most economical course of action. Because the lender can seize and sell the equipment to recover its losses if the borrower defaults, the presence of collateral significantly reduces the lender’s risk. This makes it more likely that you’ll receive favorable rates and terms on an equipment loan.
Wells Fargo equipment finance: Cost and terms
For your small business, you should always search for the best equipment loan, but we’ve found that Wells Fargo equipment finance offers very competitive terms. Additionally, the majority of business owners can access Wells Fargo equipment financing thanks to its more than 6,000 locations across the US.
Wells Fargo refers to the loan for small business equipment financing as the Equipment Express loan. For specific industries, Wells Fargo also provides larger capital and more flexible terms under a commercial equipment finance program, but for the majority of small businesses, the Equipment Express loan provides sufficient funding to complete the task.
The following term lengths are available for Wells Fargo small business equipment finance loans:
Wells Fargo equipment finance: Minimum requirements
The following minimum requirements apply to loans from Wells Fargo for equipment financing:
Keep in mind that the following industries offer Wells Fargo equipment financing:
Although a variety of businesses can be approved for an equipment loan, the amount you can borrow and the interest rate you’ll pay depend on the track record of your company. The bank will take into account your credit history, the financial health of your company, and the cost of your equipment.
However, since the equipment serves as collateral for the loan, your credit history and financial history are less important. This is one of the biggest advantages of equipment loans. Lenders are frequently more interested in the equipment you intend to purchase and its value than they are in your financial history. This makes equipment loans an appealing option for start-up companies and for business owners who have trouble getting credit approval.
Naturally, you must keep in mind that if your personal credit score is lower or your business’s revenue history is shorter, you may end up paying a higher interest rate on your equipment finance loan than you would otherwise.
You may be required to make a down payment for some equipment loans, though not all of them do. This may be as low as 0% if you are a low-risk applicant. For applicants with riskier financial histories, that percentage may increase to 10% to 20%.
Wells Fargo equipment finance: How to apply
Wells Fargo equipment finance has a relatively straightforward loan application process, but in order to ensure a smooth equipment finance process, you should do your homework beforehand and have the required paperwork on hand.
Consider your financial history, the type and cost of the equipment you plan to purchase, and other factors as you prepare your application to determine how much you can borrow.
Applying for a Wells Fargo equipment finance loan involves the following steps:
- Account number of current Wells Fargo checking or savings accounts.
- Business name, address and phone number.
- SSN of the primary borrower.
- Business tax ID.
- Ownership type and number of owners.
- Profit and loss statement showing gross annual business revenues.
- Annual income, banking account information, and ownership stakes for anyone with a 25% or greater stake in the company
- Copy of drivers license.
- Voided business check.
- Business tax returns.
- Equipment purchase order or dealer invoice.
Wells Fargo equipment finance: The pros and cons
There are advantages and disadvantages to obtaining Wells Fargo equipment financing, just like with any loan. Most businesses find that the advantages outweigh the disadvantages, and the funding makes it possible to buy the equipment you need to launch a new venture or expand an existing one.
The benefits and drawbacks of equipment financing from Wells Fargo largely depend on your unique credit situation. The application process moves along quickly if your credit is good, and you can be approved for 100% financing at a low interest rate. However, there might be difficulties if your business is new or if your credit isn’t that great.
Wells Fargo equipment finance pros
Wells Fargo equipment finance cons
Wells Fargo equipment finance vs. equipment leasing
Both loans and leases are available for equipment financing through Wells Fargo and the majority of other lenders. With a loan, you make consistent principal and interest payments, and in the end, you become the owner of the machinery. You essentially rent the equipment from the vendor with a lease and make consistent payments. But you won’t be the equipment’s owner when the lease expires. You must then decide whether to buy the equipment or return it.
With a variety of equipment lease options, you can benefit from lower payments and fewer qualification requirements. Furthermore, a lease eliminates the need for a down payment. However, you won’t be the owner of the apparatus when the term is over. Therefore, an equipment loan is preferable if you’re looking for a long-term business loan solution. However, a lease is probably preferable if you require equipment that quickly becomes outdated (such as medical equipment), as you’ll want to upgrade at some point.
The key to selecting the appropriate equipment financing for your small business, whether you choose a lease or loan structure, is to ensure that the loan or lease’s term won’t outlast the equipment itself. When you’ve finished using the equipment or it’s time to upgrade, you don’t want to be stuck paying.
Wells Fargo equipment finance alternatives
Although Wells Fargo offers equipment loans, there are other options if you can’t get approved or think their terms don’t work for you.
Some other places to get equipment finance include:
How Much Do You Need?
Is Wells Fargo equipment finance right for your business?
You must consider a number of aspects of your company because every business is different before determining whether or not an equipment loan is the best course of action.
Our best advice here: it takes money to make money. Sometimes you have to spend money if your small business needs to expand. Investing in equipment that will increase your productivity, allow you to produce more products, or allow you to work longer hours is one of the simplest ways to expand your business.
This funding choice is a wise choice for any business owner looking to lower the cost of a significant equipment purchase, whether you choose to pursue equipment financing from Wells Fargo or from a different source.
You must fulfill the following requirements in order to be eligible for equipment financing with Wells Fargo:
You can then start the initial application process online if you meet these requirements for business loans and have had a Wells Fargo checking or savings account open for at least a year.
Wells Fargo will decide if to approve you after you submit the initial application. If your loan is approved, you’ll work with a Wells Fargo loan consultant who will gather more details about the equipment you plan to buy, process your loan, and close it.
A business loan known as an equipment loan is used to buy equipment, such as cars, appliances, machinery, furniture, computers, and other items.
The equipment you’re buying serves as collateral on the loan, so if you default on the loan, the lender may seize and sell the equipment to recoup their losses. Although an equipment loan can be structured in a variety of ways.
However, because equipment loans are a self-securing type of financing, you can typically find reasonable rates and terms.
The repayment terms for heavy equipment financing typically depend on the particular piece of equipment you want to buy.
Typically, you’ll finance your equipment over the course of its anticipated lifespan. For example, if you want to finance a bulldozer that will be useful for the next seven years, you’ll pay it off over that time.
However, the typical length of an equipment loan is between five and six years. How do you get equipment financing from Wells Fargo?.
You must fulfill the following requirements in order to be eligible for equipment financing with Wells Fargo:
You can then start the initial application process online if you meet these requirements for business loans and have had a Wells Fargo checking or savings account open for at least a year.
Wells Fargo will decide if to approve you after you submit the initial application. If your loan is approved, you’ll work with a Wells Fargo loan consultant who will gather more details about the equipment you plan to buy, process your loan, and close it. What is an equipment loan?.
A business loan known as an equipment loan is used to buy equipment, such as cars, appliances, machinery, furniture, computers, and other items.
The equipment you’re buying serves as collateral on the loan, so if you default on the loan, the lender may seize and sell the equipment to recoup their losses. Although an equipment loan can be structured in a variety of ways.
However, because equipment loans are a self-securing type of financing, you can typically find reasonable rates and terms. How long can you finance heavy equipment?.
The repayment terms for heavy equipment financing typically depend on the particular piece of equipment you want to buy.
Typically, you’ll finance your equipment over the course of its anticipated lifespan. For example, if you want to finance a bulldozer that will be useful for the next seven years, you’ll pay it off over that time.
However, the typical length of an equipment loan is between five and six years.
This article originally appeared on Fundera, a subsidiary of NerdWallet.
Priyanka Prakash is an author who specializes in small-business finance, credit, law, and insurance. She assists business owners in navigating challenging ideas and choices. After graduating from the University of Washington Law School, Priyanka has been writing about small-business financial and legal issues for five years. Read more.
FAQ
Which Bank is best for commercial vehicle finance?
Bank of America is the best overall because it offers low rates and allows funding for dealership vehicles. Wells Fargo: Financing for dealerships and private vehicles. Crest Capital: Online lender with terms similar to traditional banks. U. S. Bank: Businesses in the West or Midwest who require financing for new or used vehicles
What is the best way to finance a truck?
- Check your credit score before you go to the dealership.
- Before you go, get financing quotes if your credit isn’t perfect.
- Keep the term as short as you can afford. …
- Put 20% down. …
- Pay for sales tax, fees, and “extras” with cash. …
- Don’t fall for the gap insurance speech.
What is the interest rate for commercial vehicle finance?
Commercial vehicle loans have annual interest rates that range from 12% to 26%. In its Circular DNBS / PD / CC No., the Reserve Bank of India (RBI) had stated 95/ 03. 05.
How many years can you get on a commercial car loan?
Loan repayment period of up to 30 years. Choice of fixed or floating interest rate packages.