The Pros of Equipment Financing
Equipment financing allows a business to spread out the cost of purchases over a fixed amount of time, retaining accessible cash and working capital.
With this specific purchase funding type, it is possible to obtain 100% financing with no down payment. New companies lacking accessible capital can acquire needed items to start operating quickly.
Quick Access to Funds
Applying for this type of lending is typically quick and easy. The items themselves serve as collateral for a loan, and leases do not require collateral. The application process is relatively simple. The funding process can take anywhere from one day to two weeks, depending on the supplies’ total cost. This speed allows an owner to address needs as they arise.
Increased Purchasing Power
Borrowing money for items enables companies to obtain better or more equipment than they could otherwise, keeping them on top of technological advances and industry trends.
Borrowers can customize the finance solutions specific to their unique requirements and budgets.
Loans and leases enable a company to acquire things they couldn’t get otherwise, allowing them to operate efficiently. This access to necessary supplies provides a better chance of continued success and growth.
Finance options allow an operation to maintain its cash flow by spreading the cost of needed assets over time with monthly payments. These payments also give a company the ability to prepare accurate budgets and forecasts.
Conservation of Capital
Leasing does not require a large amount of money upfront. Existing cash remains liquid for working capital needs.
Increased Return on Assets
An operating lease does not reduce working capital, improving reported income and return on assets.
Equipment financing provides the opportunity to have the newest technology. It gives owners the option to acquire items as needed, giving them an advantage over competitors.
Preserve Bank Lines of Credit
This lending option is specific to equipment purchases. In this way, acquiring funds does not tie up or reduce established credit lines, keeping it available for other potential needs.
Leasing options mitigate the uncertainties associated with physical asset ownership, allowing a business to focus on operations.
Certain finance products are sometimes eligible for tax relief or tax-deductible payments.
Equipment financing has a specific purpose providing many advantages for businesses, including access to the latest technology, maintaining cash flow, reducing the risks associated with asset ownership and more.