Small and large businesses alike finance equipment to manage cash flow while meeting capital expenditure needs. Equipment financing offers several advantages over cash purchases of large ticket items such as computers, construction equipment and other equipment that is essential to your enterprise.
Traditional institutions usually require a down payment when you request a business loan. However, with equipment financing loans, you can often receive 100 percent financing with no down payment. This keeps more cash in your coffers and lets you spread the cost of the equipment over its useful lifecycle.
If you are financing leased equipment, you often have an option to upgrade to updated machinery or add accessories. This helps businesses combat the issue of obsolescence when a newer version of the equipment comes out months after you have purchased it. Stay current with the latest technology without having to offload old equipment and obtaining new financing.
Equipment financing loans are usually processed quickly since they are backed by your ongoing business. There’s often a direct link between new equipment and the efficiency of your operation. So, it’s relatively easy to connect the purchase to improved profitability. This lets your finance provider know you can meet your payment obligations.
Financing equipment purchases helps you keep your working capital and lines of credit available for future needs. Anything can happen, and Murphy’s Law often hits you with unexpected expenses right after major cash outlays. So, take advantage of equipment financing to keep your cash for other business needs.
Even if your operators and employees are careful with equipment, at some point maintenance and repairs are necessary. By financing your equipment, you might be eligible for options to finance expensive repairs that crop up or have some of these services included in the agreement. This is advantageous in a number of ways. You can get the equipment up and running without having to deal with the repairs yourself or paying an exorbitant fee at one time.
The payments could be tax deductible. Also, predictable payments let you accurately budget and forecast for expenses. This also provides more accurate profitability trending, since the costs will be better aligned with monthly revenues and recurring costs.
Financing gives you the flexibility to react to technology advances that are impacting your industry. Acquire high-end equipment when you need it to stay competitive.
From an accounting perspective, you get your financing off the balance sheet, increase your return on assets and improve annual margins due to the predictability of the financing expense versus a single, whopping purchase that tanks your ROI for months or even years.
You don’t have to put your business on the line with a lump-sum purchase of equipment that may take months to impact your revenue stream or reduce costs. To learn more about equipment financing loans and working capital loans, contact us at MY Company Funding. We can help with all your financing needs.