Equipment Financing: At Year-End

Many businesses give additional consideration to equipment financing as the end of the year approaches in order to take advantage of special incentives lenders and captive vendors may offer. While such deals are often available, it’s important to keep financing in mind for acquiring the equipment your business needs regardless of the time of year. From commercial banks to manufacturers to smaller, more specialized commercial finance companies, a variety of options can be found. The key is determining your business’s needs so you can select financing that will best address them.

The Push Behind Year-End Deals

There is typically a push by leasing and finance companies to close transactions every December, mainly to take advantage of any tax benefits during that fiscal year. As a result, the Monthly Leasing and Finance Index (MLFI) issued by the Equipment Leasing and Finance Association (ELFA) traditionally shows new business volume spiking in December. When tax benefits for equipment leasing and finance companies exist, there should be an added incentive for them to offer better deals to customers.

For company managers, the push to complete equipment financing transactions by year-end may stem from a couple of scenarios. One is the ability to leverage the year’s unused operating funds to secure better terms or larger deals with financing companies who are eager to get deals done. Another is the need to maximize the allocated budget—to “use it or lose it”—so it’s not reabsorbed back to the company and possibly cut from next year’s budget. In either case, it is recommended that businesses consult with their accounting advisors to ensure they are getting the right equipment with the best possible terms.

To learn more about leveraging equipment financing in your business strategy, visit for a wide range of resources, including informational videos, the various types of financing, a glossary of terms, a lease vs. loan comparison, and questions to ask when financing equipment.