Equipment Financing: Advantages All Year Long
Given growing equipment demand amid ongoing economic uncertainty, many businesses find that equipment financing is a key acquisition strategy. The current market shows equipment financing is as vital and available as ever, enabling businesses to secure the assets they need while achieving their operational and financial objectives. A closer look at 10 key benefits of equipment financing will show clearly that there’s no need to wait until the end of the year to acquire equipment:
1. Flexible Financial Solutions. The types of financing solutions equipment finance companies offer—especially leases—are flexible and can be tailored to specific accounting, tax, or cash flow needs.
2. Capital preservation. Financing versus spending cash, and particularly the type of financing employed (lease vs. loan) can help mitigate the uncertainty of investing in a capital asset that may not yield the desired return or increase efficiency, cost savings, or future sales.
3. Improved Expense Planning. Maintaining cash flow and consistent budgeting is another benefit of equipment financing. Instead of considerable capital outlays resulting in huge budget fluctuations, financing enables even expense planning.
4. Business Cycle Flexibility. Some types of leases allow for seasonal business fluctuations, lower monthly payments while a project is ramping up and revenue is not yet being generated from the equipment, and other specific circumstances.
5. Up-to-Date Technology. Many businesses couldn’t afford to buy outright the equipment they need to be competitive and thrive. With term financing, they are often able to acquire more and better equipment that may have been out of their reach if they only considered buying it.
6. Equipment Expertise. Many equipment finance companies are equipment experts and offer equipment specialties which other sources of finance do not. Equipment financiers have special relationships with manufacturers and distributors, specializing in certain equipment types or industry categories.
7. Managed Obsolescence. The risk of owning obsolete equipment is eliminated if you use lease financing for your acquisition, since many agreements allow for easy, fast equipment updates. Most equipment finance companies, in partnership with their vendors, will work with your business to “right size” the equipment.