Financing Equipment for Your Business
If you are considering starting a new business or you are looking to build upon your current business, then you are likely in need of some extra funds to supplement your growth. In cases such as these, doing some basic equipment financing may be a smart and necessary step in achieving this growth for your business. To help you get started, here are a few basic points to consider:
One of the greatest reasons that businesses often choose to go with equipment financing instead of purchasing a piece of equipment outright is because of the cash flow within your business. By financing, you can hold onto your cash, which may best be suited for other areas of your business, and then pay a lower monthly payment for your equipment for a specified amount of time. If this equipment you need is what will help you earn income in your business, then you can even think about it as if it were paying for itself month to month.
Staying Up to Date
A lot of businesses need to update their equipment every few years. For example, companies that handle a lot of technology need to be aware of newer emerging technology and update to the new specs to stay on the front lines of their business and not become irrelevant. If your business requires updating equipment every so often, equipment financing can help you get the latest technology at a much lower price rather than paying a large up-front sum of money.
The IRS tax code, specifically section 179, gives businesses a special advantage when it comes to financing for new equipment, which is often not available when you purchase with cash or with a loan. Essentially, leasing your equipment is 100% deductible with no limit, so by leasing your equipment you can ensure that there will be future tax deductions. However, like any advice you read online, be sure to consult your tax representative on whether or not this would apply to you before moving forward. You need to avoid any possible misunderstanding!
Choosing to finance the new equipment for your business is often a great way to expand your business or start your business from ground zero. Make sure you consider everything when planning out your financing and when in doubt, be sure to contact a professional who can get you started.