Why Should You Finance Equipment?
Updated: Jan 20, 2020
Equipment financing can be beneficial in many ways. Most of us believe that paying for things in full or just putting it on the credit card is easier and more efficient. It may be for the time being, but not so much in the long run. As a business owner, you want to make the best possible decisions for your business financially. Money is valuable and we understand that not all of us have enough for everything we need for our business. Financing can help with that.
Equipment financing offsets the risk. What does that mean? If you finance a piece of equipment as opposed to purchasing one, it will lower the financial risks that can affect your business when a large purchase is involved. We know equipment is the opposite of cheap. A lot of thought goes into an equipment purchase. “Will it be worth it? Can we cover the costs? How will we keep up with maintenance?”
"Equipment financing gives the business owner time to pay for the equipment in a structured way at a fixed rate that works for them, rather than going straight out of pocket and potentially putting themselves in the tough spot financially." -Nicole Vatistas, Equipment Underwriter
With financing you are able to use a piece of equipment while paying it off simultaneously. This is more beneficial for companies who are in constant need to purchase equipment as well. This way they’ll be able to keep doing business, taking on more customers — more money while slowly paying off the equipment over time. This will also save money towards important expenses that are needed such as marketing.
“Let the equipment work and generate money over time. Purchasing can put a dent in cash flow taking it away from important things like marketing.” -Evan Sowa, Finance Manager | Equipment Financing
Write larger deductions for the tax year. Yes you can write a deduction for the full price of the equipment, BUT with equipment financing you can write the full price along with any charges that were included in the agreement. This way you’ll be able to receive more money back.
So not only does equipment financing take the pressure off of using your cash flow, but you will be able to make more money on top of that. Most people immediately think “debt” when financing is involved. We hope this changes your perspective on that! As you can see, it can be more beneficial than harmful. Take advantage of equipment financing for your business today!