Equipment financing allows you to protect cashflow while aligning payments with the lifecycle of assets. In some cases, equipment financing may even allow for tax deductions under Section 179 – should it qualify.
Equipment loans differ from other loan types by not necessitating perfect credit or an established business history; making them accessible even to newer or struggling companies.
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Equipment financing offers businesses a great way to obtain equipment they require without tapping their cash reserves, keeping pace with new technologies and efficiency improvements while saving on tax deductions.
Equipment financing provides several advantages to businesses, including protecting cash reserves that could otherwise be spent elsewhere and spreading out the cost of equipment purchases so they can budget for it monthly.
Businesses looking to upgrade their gas pumps for EMV payments or upgrade tanks to meet new EPA regulations or make any other large capital purchases may find lease agreements helpful when making these purchases. Also, leasing may make more financial sense than outright purchasing due to being more flexible with budget constraints and providing greater peace of mind when leasing options come up.
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Equipment financing allows your company to buy equipment without emptying its cash reserves. By only making a minimal upfront payment, this solution is especially valuable for businesses that rely on consistent cash flows for survival.
Loans and leases allow you to acquire more advanced or specialized equipment than may otherwise be affordable, while providing tax advantages like Section 179 tax deductions.
Additionally, many equipment financing lenders provide more lenient credit requirements than traditional financial institutions and some even provide wrap leases that combine your current and new equipment into one agreement with one monthly payment; this can streamline paperwork and save time.
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Equipment acquisition is often an enormous expense for businesses, and financing the purchase helps reduce its effect on cash flow and standing in the marketplace. Equipment leases and loans also contribute positively to credit scores which help improve overall reputation of a company.
Business equipment financing provides several additional advantages for companies. Companies can use financing options like this one to preserve cash reserves and align payments with the useful life of equipment they purchase such as cars, technology, production equipment, office furniture and fixtures, medical devices or build-out costs for new facilities.
Some equipment financing solutions also provide tax benefits that can offset the cost of loans or leases, and usually require less stringent underwriting requirements than traditional business loans, making them accessible even to newer or struggling companies.
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Business equipment financing can be an ideal way for businesses that need expensive technology or machinery to acquire it without incurring large one-off purchases, saving working capital for other needs such as salaries and inventory purchases. Furthermore, financing reduces the risk that an item of equipment becomes obsolete before fully paid for – potentially eliminating obsolescence risks altogether.
Business equipment financing offers another advantage over traditional loans: easier qualification requirements. Many online lenders use an efficient process that evaluates your company’s revenue and assets to assess whether financing should be approved – this makes it simpler for turnaround or COVID-19 businesses to secure funds, while potentially eliminating collateral requirements altogether.
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Equipment financing offers small businesses a convenient solution to acquire the equipment necessary without making a large up-front payment, saving cash for other expenses. But it is crucial that equipment financed will actually add value to your revenue streams; you’ll need an adequate equipment valuation report, while lenders want your monthly debt payments to be less than your annual revenue stream.
Loans and leases provide businesses with a way to conserve cash by not investing it in rapidly depreciating assets, and align payments with its useful life. Furthermore, equipment financing may even be tax-deductible – something especially helpful for new businesses or those in turnaround mode.