Crestmont Capital Blog

Commercial Cleaning Equipment Financing & Leasing: Keep Your Business Running Smoothly

Written by Mariela Merino | December 18, 2024

The commercial cleaning industry thrives on efficiency, reliability, and quality service. To meet customer demands, cleaning businesses need access to high-quality equipment, such as floor scrubbers, pressure washers, and industrial vacuums. However, purchasing this equipment outright can be costly. Financing or leasing provides a cost-effective way to acquire the tools necessary for success without a significant upfront investment.

This guide explores the benefits, options, and processes for financing and leasing commercial cleaning equipment.

Why Choose Financing or Leasing for Cleaning Equipment?

Investing in commercial cleaning equipment is essential to growing your business. Financing or leasing allows you to get the equipment you need while preserving your cash flow for other expenses.

Benefits of Financing or Leasing Cleaning Equipment

  1. Affordable Payments
    Break down the cost of expensive equipment into manageable monthly payments.

  2. Access to Advanced Tools
    Ensure your business stays competitive by using the latest cleaning technology.

  3. Improved Cash Flow
    Free up working capital to cover operational expenses, payroll, and marketing.

  4. Tax Advantages
    Lease payments or equipment depreciation may be tax-deductible, depending on your agreement.

  5. Flexibility
    Leasing agreements often offer the option to upgrade or return equipment as your needs evolve.

Types of Cleaning Equipment Eligible for Financing or Leasing

Most types of commercial cleaning equipment qualify for financing or leasing, including:

  • Floor Cleaning Equipment

    • Floor scrubbers
    • Buffers
    • Carpet extractors
  • Pressure Washing Equipment

    • Hot and cold pressure washers
    • Surface cleaners
    • Water reclamation systems
  • Vacuum Systems

    • Industrial vacuums
    • Wet/dry vacuums
    • Central vacuum systems
  • Specialized Equipment

    • Steam cleaners
    • Disinfectant sprayers
    • Air purifiers
  • Other Cleaning Tools

    • Waste disposal equipment
    • Janitorial carts
    • Chemical dispensers

Financing Options for Commercial Cleaning Equipment

When financing your cleaning equipment, there are several solutions to consider:

1. Equipment Loans

Borrow the funds needed to purchase cleaning equipment and repay in fixed monthly installments. The equipment itself serves as collateral.

2. Business Lines of Credit

A revolving credit line allows you to draw funds as needed for equipment purchases or other expenses.

3. SBA Loans

The Small Business Administration offers loan programs with low interest rates and extended repayment terms, suitable for equipment financing.

4. Vendor Financing

Many equipment suppliers provide in-house financing options with competitive terms for their products.

Leasing Options for Cleaning Equipment

Leasing is an excellent option for businesses that want flexibility without committing to full ownership upfront.

1. Operating Lease

Use equipment for a specific period without owning it. Ideal for short-term projects or rapidly changing technology.

2. Capital Lease

A lease designed for eventual ownership, with payments that often result in lower costs compared to renting.

3. Fair Market Value (FMV) Lease

At the end of the lease term, you can return the equipment, renew the lease, or purchase the equipment at its fair market value.

4. $1 Buyout Lease

This type of lease allows you to own the equipment at the end of the lease term for a nominal fee of $1.

How to Qualify for Financing or Leasing

Lenders and lessors look for specific qualifications when evaluating applications:

  1. Good Credit
    A strong credit history increases approval chances and can secure better terms.

  2. Business Financials
    Prepare income statements, cash flow records, and balance sheets to demonstrate repayment ability.

  3. Time in Business
    Established businesses may have an advantage, but startups can still qualify with a solid business plan or additional collateral.

  4. Equipment Details
    Provide quotes, specifications, and the intended use of the equipment in your application.

Steps to Secure Cleaning Equipment Financing or Leasing

  1. Assess Your Needs
    Determine the equipment required for your cleaning business and its cost.

  2. Research Providers
    Compare rates, terms, and customer reviews from different financing or leasing companies.

  3. Prepare Your Application
    Gather necessary documents, including financial records and equipment details.

  4. Submit Your Application
    Complete the application process with your chosen provider and await approval.

  5. Review the Agreement
    Carefully examine terms such as interest rates, repayment schedules, and end-of-term options before signing.

Tips for Choosing the Right Option

  • Match Payments to Revenue Cycles: Select a plan that aligns with your business's income stream.
  • Plan for Maintenance Costs: Ensure your plan accounts for repairs and upkeep, either through warranties or service agreements.
  • Think About Scalability: Choose options that allow for easy upgrades or expansion as your business grows.
  • Seek Professional Advice: Consult a financial advisor or tax professional to optimize your decision.

Conclusion

Commercial cleaning equipment financing and leasing provide a smart way to access the tools you need to succeed in a competitive industry. Whether you’re upgrading to advanced technology, expanding your operations, or starting a new cleaning business, these options offer flexibility and affordability. Partner with a reliable financing or leasing provider to ensure your business is equipped to meet customer demands and achieve long-term success.