Why Business Equipment Finance Makes Sense

If you are starting a new venture, or you are expanding an existing one, then you might be going through a menacing time to set things up. It is a complex undertaking when you have to spend a lot of money for more equipment, or else the new business won’t run. Equipment procurement is an essential part of setting up a business and you don’t have much choice but to buy new gears and paraphernalia to get things started.

First, you have to plan for the equipment needed and it is important that you know how to select the products that would address your needs. After you have determined the equipment needed, you have to create a plan on how you should be paying for the equipment. If you don’t have money to spend for it, then you probably need a business equipment finance company.

What is this company that would supply financing for your equipment purchase? Basically, this is considered a smart thing to do when you are short of funds to buy equipment. Or even when you have money, you can use the equipment loans to pay for practically any kind of business equipment you require. The amount you can borrow would vary and it would depend on the equipment you are procuring, and the state of the equipment such as if it is new or a used equipment.

You would normally need financing if you need a car loan. If you have already tried a car loan, then you have probably known how the financing system works. The equipment will serve as your collateral to the company that gives business equipment finance. The interest rates are fixed which can be from 8% to 30%, depending on the term. These companies also offer a fixed length for terms, and this gives the borrower ease in repayment through having the same amount of amortization every month.

The length of the loan term would also vary, depending on the nature of the equipment and how long it is expected to be useful. There is varying depreciation of different equipment and this is to be considered before the terms can be determined. Some equipment types are given 36 months or 48 months terms. But some terms provide only 12 months for loan to be repaid.

What type of business equipment can qualify for equipment loans? All sorts of equipment would be viable for this such as: IT equipment and computers, heavy machinery, medical equipment, scientific equipment and commercial vehicles.

Thus, you can get a loan for trucks, prime-movers, tractors, tankers, laptops, desktops, servers, factory automation, robotic assembly devices and many more. The list is long and you have to talk with the company’s representative to determine if the equipment you need can be financed.

You may get advised on having a lease on your equipment and not a loan. However, with a lease, you are only renting the equipment and it won’t be yours after the lease term is done. With a loan, you own the equipment once fully paid.

Why Companies With No Real Asset Value So Much: 7 Essential Elements They Consider

Do you actually consider that a company with no real asset can value so much as $40 billion? Well, you are going to find out in this short article today.

Today, I believe you will benefit from some of the simplest elements in valuing a company. So let’s begin, the 7 essential elements most companies consider when they value themselves based on milestones.

I was searching for a topic this morning when I came across a discussion on Reddit “How Companies such as Uber and Ashley Madison Value Themselves”? The discussion caught my attention when one of the participants said, “I was reading about Ashley Madison scandals and how it has sales of $115 million but values itself at $1 billion.

Even a company like Uber that has no real asset value at $62.5 billion, where did they get those values from?” and I know that some of you out there might have also wondered how they got those values?

Well, most companies value themselves based on their milestones. Let me give you one example, if you watch Uber news you will see that they always talk about their milestones.

The company proudly announced that they have reached the new milestone on April 14, 2015. Wayne Ting said, “the number of Bay Area driver-partners on Uber platform exceeded 20,000 for the first time… And we were not even halfway there just one year ago”.

Then again on June 28, 2015, they also exceeded their milestone in South Africa, and this year 2016, their target is to hit another milestone in China. Okay, in that case, let’s briefly brush over the 7 essential elements that most companies look at when they value themselves:

#1: Business plan – The number one thing they would be proud of is that they have a business plan. They know the purposes of a business plan, that you can use it when you want to raise funds. You can also use it as a marketing tool and as a planning tool.

#2: Money – Money is a very important tool in every business, you know that. They go and raise some cash.

#3: People – They also hire people, and Remember the number 1, 2, 3 things investors look at when they value a company is people.

#4: Products – Another thing is that they build their products, and take them to the market. It might just be a company’s app or something like that.

#5: Customers – When there are no customers, there would be no sales, and when there are no sales definitely there would be no profit. They carefully figure out who their major customers are, or their target market. They may base their target on demographics, or university students of lower or upper grade, geographical or what have you.

#6: Marketing – This is very, very important. Marketing is the propeller that propels their products to the desired market, I mean the right market. It also helps your brand name gain exposure, when handled effectively.

#7: Risk – So what most venture capital firms do is that they look at a company’s risk factors, if the stage of the risk of the company is less, generally, they worth more money on all those stages.

Who Is The Winner In 3PAR HP $2.35 Billion Deal?

Recently Hewlett-Packard agreed to buy 3PAR for $2.35 billion. 3PAR makes high-end computer storage systems and this company looked like a must have trophy wife for two rivals. For a few weeks there was quite a bidding war between HP and Dell. The bidding war started with Dell offering $18 a share and eventually HP winning the deal by offering $33 a share. Back in 2007 3PAR went public at $14 a share. What a fantastic deal this should have been for company founders!

Not many people realize that founders of start-ups such as 3PAR by the time of the exit only own 2% – 5% of company’s shares. Jeffrey Price, one of the founders will get $41.4 million for his 2% ownership. That is correct he is one of the early owners founders and he only owns 2% of the company.  Mr. Ashok Singhal who owns less than 1% shares of the company will walk away with $18.8 million. At the time of the deal it was unknown about the ownership percentage of the third founder Robert Rogers. The guess is he owns peanuts.  On the other hand company’s CEO David Scott who was brought in to the company by investors in 2001 owns 4.6% shares of the company. Mr. Scott former HP executive is getting $95.7 million from this deal. The largest ownership share of combined 38% in 3PAR, of course, belongs to the big money guys/venture capital firms – Mayfield Fund, Menlo Ventures and Worldwide Technology Partners.

The story is that usually the original founders rarely remain majority shareholders by the time the start up reaches exit stage.  Multiple rounds of investments made by investors and venture capital firms typically dilute ownership stake of original founders. Quite often the original founders’ team gets pushed of the boat by the big money guys. At the end of the day capitalism still rules! That’s why with my start up I chose not to have any investors.