For many business owners, it can be challenging to maintain the proper equipment necessary for success. But with the help of equipment finance, small businesses can source quality equipment at rates that work for their budget. Various equipment financing programs are available to small business owners that offer them flexibility when buying large pieces of equipment. Equipment financing can be used by paying a smaller amount over a long period, helping the company secure the equipment they need without spending all their operating cash flow in one go.
Equipment financing can often cover small business needs, allowing you to purchase the equipment at low rates. Let’s explore why use equipment finance for small businesses!
The Advantages Of Equipment Finance:
Increases The Overall Working Capital
A clear advantage of using equipment financing is the increase in cash available for your business. Unlike with borrowed money, every penny you owe with equipment financing is typically limited to just the payment on the new piece of equipment. When you use borrowed money, the total amount you owe must go toward an appropriate repayment route until your next big payday comes around. By taking advantage of equipment financing, you can pay your bills on time and for what they’re worth.
Keeping Up With The Best Equipment
With equipment finance Perth, business owners won’t have to worry about the consequences of not having state-of-the-art equipment. This resource for equipment makes it available without worrying about the up-front cost, which may be restrictive for some entrepreneurs.
It Can Render You Tax-Free
Equipment financing is an excellent option for entrepreneurs of all sizes, providing tax benefits that can outweigh the application of your business taxes. The interest paid on financing payments over the borrowed duration can be exempted from taxes, while monthly lease payments for most lease programs can be written off in their entirety. With equipment leasing, outright purchases are also eligible to receive deductions.
Decreases Other Lines Of Credits
Equipment financing is a valuable option for many small business owners because it opens up other lines of credit. For example, the result may be that the lending institution would then offer less finance or repayment flexibility relative to what is available when there was no equipment involved. Equipment financing also offers borrower’s collateral in the form of machinery.
The Application Process Is Relatively Easy
For instance, $200,000 is considered a ‘small ticket item when applying for equipment financing.’ For equipment that costs under $200,000, the application process is typically relatively quick and efficient. There is a highly likely chance that it possibly takes less than a day or two to complete the overall application process. Equipment that costs over $200,000 is often less efficient and might take up to four weeks due to more time-efficient verification of businesses and types of equipment.
Equipment finance is more compatible than other loan options for small businesses, which may not have the credit history needed to receive a traditional business loan. They use equipment as collateral, so there is no need for credit history or other types of financial security.