But when is the perfect time to finance equipment for your business?
Equipment is essential for growing your business. But the hard part is that buying it outright can be a huge cost. Equipment financing can be a smart strategy for preserving cash flow, avoiding obsolescence, taking advantage of tax deductions, and keeping your business infrastructure well-organized.
In this article, we will explore three amazing ways to evaluate the right time to finance equipment for your business.
In this article…
- Equipment Financing: Key Benefits
- 3 Ways to Evaluate the Right Time to Finance Equipment
Equipment Financing: Key Benefits
First, let’s explain the many benefits of equipment financing in detail. After all, experts predicted that a whopping 54% of equipment acquisition deals would be financed in 2024. Equipment financing offers the following benefits:
- Cash Flow Preservation: Equipment financing spreads out the cost of equipment in low monthly payments. Small businesses can preserve their cash reserves so they don’t make any large, upfront payments on heavy-duty equipment, such as tow trucks, skid steers for landscapers, boom trucks, septic pumper trucks, embroidery equipment, and screen printing equipment.
- Outdated Inventory Avoidance: Financing gives businesses the flexibility to upgrade to the latest equipment technology. So, your business can stay up-to-date with the latest equipment that doesn’t break down or need constant repairs.
- Tax Deductions. Financing qualified equipment could make you eligible for a big tax deduction! Under Section 179 of the IRS tax code, you can deduct the full purchase price on a piece of equipment.
- Establish and Build Business Credit: Another remarkable benefit of financing equipment is that it enables your business to improve its credit profile. Beacon Funding reports to the three major credit bureaus, meaning when you make payments on your financed equipment, it will establish your company’s credit profile. As a result of positive payment history, you could get better financing options in the future.
3 Ways to Evaluate the Right Time to Finance Equipment
Here’s how you can determine the ideal time to finance equipment:
- Evaluate your current cash flow and budget.
- Evaluate your current and future equipment needs.
- Evaluate the financing options available to you.
Consider this breakdown of all these three smart ways, and you’ll realize when to strike when the iron is steaming hot! Contact Beacon Funding for more updates on equipment financing.
Method 1: Evaluate your current cash flow and budget
The first payment involves evaluating your current cash flow and budget. In this phase, you ask yourself a range of crucial questions regarding the availability of funds. Do you have enough funds to cover your monthly payments? Will you be able to afford maintenance, insurance, and other expenditures?
You should also compare the total cost of equipment financing over the loan’s lifespan with the cost of buying it outright. This method will help you determine if financing matches your business goals.
At Beacon Funding, we specialize in helping startup businesses finance necessary equipment, we can help you perform this analysis easily. So, get in touch with us to craft the right flexible financing plans.
Method 2: Evaluate your current and future equipment needs
What equipment do you need today or need in the near future? That’s another vital question to ask before investing in financed equipment.
Here’s what you should look for:
- The intended duration of the business equipment use.
- The frequency of upgrading or replacing the equipment.
- The role of that equipment in your overall, long-term business strategy.
No matter how simple or complex your situation is, Beacon Funding’s financing consultants have creative options to help you achieve your goals. Make sure to identify what your business needs the most and talk to your consultant about it when you apply.
To learn more about flexible financing options available to you, visit www.beaconfunding.com/businessgoals.
Method 3: Evaluate the financing options available to you
Compare different financing options before settling for the one best suited to meet your business goals.
Beacon Funding understands the unique needs of startups and offers you financing plans that suit your business goals. After all, a survey shows that average entrepreneurs spend around $40,000 in the first year of starting a new business. Equipment purchases make a very large portion of that!
Beacon Funding offers you flexible terms and conditions along with a customized payment schedule. Equipment financing can bring down this cost significantly, so you can start a new business without worrying too much about costs.