Financing your equipment is easy when you have all the facts.
We’re here to breakdown four common misconceptions business owners have with regards to equipment financing and leasing. We have answers to the most talked about questions: learn how to evaluate whether paying for your equipment in cash is better than financing, the differences between financing and leasing, whether equipment leasing will allow you to own equipment, and more!
After all, knowledge is power. Take your business to its next level by making smart fiscal decisions by knowing all the answers here.
Find answers to these equipment financing topics…
- Should You Always Pay Cash for Equipment?
- Is Upgrading Your Equipment Possible When You Finance?
- Is Leasing More Expensive Than Financing?
- Leasing Doesn’t Let You Own?
Let’s dive in.
Should You Always Pay Cash for Equipment?
This is a question we get asked a lot. When this question pops up, we remind customers about the value of conserving their cash. After all, nearly 8 in 10 U.S. companies use some form of financing when acquiring equipment.
Maintaining a stable cash flow is a sign of a healthy business. Without cash, it’s hard to keep your doors open. You need it to pay operating costs, payroll, and buying new equipment when the opportunity is right.
It takes time to save up enough cash to buy equipment. Without wasting time, equipment financing enables your business to get equipment when you need it.
If you need to quickly say yes to a new contract, take on larger orders, or take on more customers in a short amount of time, financing gives you more room to say yes.
If maintaining liquidity is your priority, then equipment financing is a great way to buy equipment without putting your business at significant risk. You could generate a greater return than the cost of financing.
Keep your cash and acquire new equipment without breaking the bank.
Is Upgrading Your Equipment Possible When You Finance?
Absolutely! Beacon Funding provides the flexibility to upgrade to newer equipment models before financing terms are over.
If you choose, you can exit your current contract and replace it with a larger, newer transaction. Afterwards, Beacon Funding will forego all the remaining financing charges on the first contract and honor the terms of the new agreement.
Oftentimes, when talking to businesses about upgrading payoffs, they’re hoping to payoff, sell, or trade-in their older equipment. This allows them to upgrade their equipment midstream with no additional financing charges and grow their business without taking on 2 monthly payments.
Upgrade your equipment.
Is Leasing More Expensive Than Financing?
In a side-by-side comparison, the cost of leasing is almost identical to financing.
The truth is the cost of leasing is determined by the strength of your credit package, not by the product you choose. Ultimately, prioritizing your credit quality is a better mindset over evaluating which option is right for you.
That’s why the most sophisticated U.S. businesses choose to lease even while financing options are available to them, allowing them to keep more cash on hand and have more flexible monthly payment plans.
See what payments are available to you.
Leasing Doesn’t Let You Own?
Many business owners think leasing equipment means there’s no way to own the equipment when the lease is over. That’s simply not true.
Beacon Funding’s commercial leasing options have equipment ownership in mind by offering buyout options when the term ends. If your goal is to eventually own your leased equipment, then a lease-to-own program is a step in the right direction.
About 90% of our lessees end up taking ownership at the end of their term through one of Beacon’s buyout options. These options include a $1 buyout, 10% of the equipment’s purchase price, and fair market value.
Learn the details about each option.