Thinking of purchasing some brand new equipment for your business to start the new year? Not so fast, equipment financing may be a better option. Businesses in all industries can benefit from equipment financing. Equipment issues can arise at any time. Whether you need to upgrade an outdated piece of equipment or replace an old broken down piece of equipment, alternative financing options are available to make your life much easier.
Quick and Easy
The biggest problem with trying to get a traditional bank loan to purchase equipment is that it could take way too long. All of your competitors could have the new equipment you need before you even get approved for a loan. And that is if you even get approved.
In many cases, banks will refuse to offer a traditional loan to small businesses. But with equipment financing, your business can easily gain funding. You can receive funding within two days of applying. This will give you the funds you need when you need them.
Preserve Cash Flow
Equipment can be a costly thing for any type of business. You don’t want to spend most or all of your revenue purchasing new equipment. This would leave you with little or no remaining working capital. Equipment financing allows you to get the equipment you need without spending any of your own funds.
When you purchase new equipment, your business can struggle to make up for the big loss in working capital. However, with equipment financing, you can set up a repayment schedule customized to fit your company budget. Use the cash you save to increase marketing efforts or hire more employees.
Stay Up to Date
In today’s world, technology is constantly advancing to create new or updated pieces of equipment that help businesses run as efficiently as possible. Because of this, it is important for a business to make sure their equipment has the latest technologies. Sticking with outdated equipment could cause your business to fall behind the competition, since new technologies may provide improved services.
Equipment financing is great for leasing new equipment because you will not actually own any of it. This means when an upgraded version of your equipment comes out, you will not be stuck owning an outdated piece of equipment. A lot of the plans come with the benefit of updating to the newest versions of equipment you’ve already have.
Tax Deductions
A benefit of equipment financing that sometimes can be overlooked is the potential for tax deductions. Under section 179 of the IRS tax code, businesses can deduct taxes for any purchases or financing of equipment. This tax code covers both used and new pieces of equipment, as well as software. For 2016, the limit for tax deductions on equipment financing is $500,000. This limit is only good for 2016, so your equipment must be purchased and put into use by the end of the day on 12/31/16. If you are unable to get this done by the end of the year, be sure to look into the limit for 2017 as it is subject to change.
Equipment Financing for Your Business
Equipment is an extremely important, yet expensive part of any business. With equipment financing, you can be sure that your company has the most up to date equipment needed to stay ahead of the competition.
CFG Merchant Solutions can provide you with the equipment financing you need. Our team brings to the table more than 60 years of institutional investment banking experience in the credit, commercial finance, and capital markets. With a variety of alternative financing options, we have everything your business may need to keep improving, even when you don’t have the working capital to do so. To see what kind of financing your business qualifies for, apply now!
