Let’s talk about rates and equipment financing for a minute, and trying to get the best deal you can for yourself. Rates on any type of lending are affected by the Federal Reserve Rate (aka, “the Fed”). If that goes up, banks and other lenders raise their rates. When the Fed goes down, lending rates lower. The actual mechanics are a little more involved than that, but this isn’t economics class, and while the algorithms and such can be complex, the universal “Fed Down, lending rates down / Fed Up, lending rates up” holds true.

In general, now is a good time to act if you are considering equipment or software purchase/financing.

Why? During the 2008 financial crisis, the Fed rate dropped to zero, to help spur borrowing and economic activity. And it’s essentially sat there for almost a decade. But late last year, something happened… the Fed raised their rate to 0.50%. Then in March it was raised to 0.75%. The Fed has made noises that there will be more rate increases later this year. It’s not guaranteed, but most people in the know think it’s likely. So what happens is, banks and other lenders will start to creep their rates higher in anticipation. That means right now is a great time to finance equipment (lease it too). The rates are still low, and equipment financing is the best bargain around, especially if your equipment lender utilizes fixed rates. This means you can lock in a great rate right now, and then smile knowingly when rates go up, because you’re unaffected. Contact GSG Capital for more information at info@gsgcapitalllc.com