5 Ways Your Company Benefits From Equipment Financing

You've heard the adage: You have to spend money to make money. Equipment financing turns that around with financing that can save you money and give you more flexibility while keeping your business on the cutting edge.

While many people might think of financing big-ticket items like million-dollar construction or medical equipment, financing applies to many types of equipment. In fact, you can lease just about anything your business needs.

Maybe you need more trucks to deliver your goods to clients. Perhaps your older computer equipment needs to be replaced with faster laptops and more networking equipment. Have you moved or expanded? You can lease your new office furniture. You can even finally replace that buggy software with a newer version that would enhance productivity.

 

Why Equipment Financing Can be More Beneficial than Purchasing

Even if you have the luxury of extra cash reserves, consider these five equipment financing benefits before writing a big check.

1. Save Capital

Let's face it, most of us don't have extra cash reserves. If we do, there are plenty of other ways to use it, like hiring new employees, stocking more inventory or expanding a facility. Avoid the sinkhole of obsolescence: Should you pay $1 million in cash for technology that will change in two years? At the end of a lease, you can return the equipment and get something more advanced, or buy the equipment if you choose.

2. Remain Flexible

A purchase commits you to one particular technology or business strategy. This is especially relevant for purchases that involve your core business offerings. While you might be able to live with aging printers or copiers, if you're a healthcare company that invested in machines for therapy protocols that are no longer in demand, your business could be at stake. Financing that technology lets you adapt as your industry evolves.

3. Benefit From a Tailored Solution

Equipment financing solutions should not be one-size-fits-all. Financing specialists discuss your goals for the asset and customize a specific product that will work for you. 

4. Shift a Capital Expense to an Operating Expense

As the year progresses, many companies find their capital budgets bursting at the seams. And yet needs and opportunities arise with little regard for those seams. A lease gives you a way to get the equipment you need without blowing up your budget.

5. Gain Predictability

Some investments—like complex technology implementations—involve unpredictable costs. A lease gives you fixed, predictable monthly payments that are spread out over time. This means fewer surprises and better cash flow overall.

 

Find the Right Financing Solution

While price is important, it's not the only thing business owners should consider. Many like to work with an organization that can grow with them and meet their changing needs. 

Business owners should also consider the following:

• Look for transparency and clarity. All terms and fees should be in writing. If something isn't clear about the contract, speak up.
• Look toward the future. Consider what else you will need such as credit, a mortgage, treasury or other banking services.