8 Benefits of Equipment Financing
When a business is short on capital, it can seriously affect whether or not it can afford new machinery and other tools for production. The answer to this problem is equipment financing. If a business can’t meet consumer demand, then this type of financing helps create a solution. When it comes to financing, there are many benefits. Here are eight of them.
- Improve Cash Flow
Your company needs as much cash on hand as possible. This form of funding allows you to get as much cash as possible to dedicate towards equipment. Due to this, you don’t have to dip into your cash flow and you can dedicate your money elsewhere.
- Preserve Credit Lines
If you have other lines of credit, this type of financing keeps you from exhausting those lines. You can conserve them until you need them and hence maintain a positive relationship with your lending institutions.
- 100% Financing
One of the biggest benefits when it comes to this type of financing is that you can get full financing. No matter the type of equipment, you can qualify for full payment. In fact, you may not even need to pay a down payment.
- Protect Against Inflation
If you were to lay down a large amount of money on equipment, you would end up with little free cash. Likewise, you wouldn’t be taking inflation and devaluation into account. This type of financing absorbs the devaluation of payments due to inevitable inflation.
- Equipment Disposal
If you have outdated machinery, you may not be able to dispose of it yourself. Some technology and equipment is unsafe to dispose of. With equipment financing, the borrower doesn’t always have to worry about it. In fact, some companies will dispose of the equipment themselves.
- No Extra or Hidden Charges
No one wants to have to deal with hidden charges. Traditional loans are fill of hidden charges that you might not be aware of at first. In the case of financing your equipment, everything is straightforward.
- Tax Savings
When it comes to this type of financing, you can usually count on it to reduce your tax burden. The equipment leases actually include the tax benefits. This means that you may save on your taxes throughout the year.
- Great Rates
There are a lot of different equipment financing rates to choose from. Since it’s a competitive market, odds are that you will find something within your budget. When it comes down to it, most rates are favorable.
When it comes to funding for equipment, several different benefits can help your business succeed.