No matter the industry, most businesses require the purchase of equipment to keep growing and thriving. From medical equipment to machinery, purchasing equipment can, however, be costly. Equipment financing gives your business a flexible means to obtain the equipment you need for the long term without greatly impacting capital cash flow in the short run.
Equipment financing offers numerous benefits to your business. One such advantage is the ability to finance 100% of the equipment purchase. Many traditional lenders will only finance a percentage of the equipment purchase, typically 80%. Equipment financing at 100% can remove this hurdle for your business.
Lower Down Payment & Less Impact on Your Cash
Leasing equipment via equipment financing means reduced impact on your capital cash flow. This can mean a lower down payment for the equipment you need, which in turn means a smaller impact on your capital cash flow. By choosing equipment financing you keep your working capital freed up for other purposes such as payroll, marketing and purchasing inventory. Instead of paying up front for pricey machinery or equipment, equipment financing allows you to lease it over the lifetime of the product.
Easier Upgrades & You can Purchase Equipment…Or Not
At the end of the lease, you can choose to purchase the equipment at fair market value or renew your lease to buy new equipment. If you decide you don’t want to purchase your equipment at the end of the agreed term, leasing gives you the flexibility to return the equipment. This enables your business to upgrade equipment in line with advances in technology at a manageable cost. Leasing equipment is an attractive option to many business owners because it makes upgrading so much easier.
Flexible Terms – Up to 60 Months
Something else you won’t find with a traditional lender is flexible terms. With non-traditional lenders like LendSpark, you can take advantage of lease terms up to 72 months. This is just one more way to keep your costs lower, as it spreads out the payments over a longer time period, thereby giving you a reduced monthly payment.
Although not always the case, leasing your equipment rather than purchasing can be a more cost effective way to obtain the equipment you need.
Lease Payments May Qualify Under Section 179 Tax Deduction
Did you know that purchasing equipment can allow you to take advantage of tax deductions? That’s right, equipment purchases, whether financed or leased, can qualify as a Section 179 tax deduction. Of course, always consult with your trusted tax professional on your specific situation to ensure that you qualify before deciding to lease equipment.
Case Study: Equipment Financing Helps Gym Open New Location to Rave Reviews
LendSpark recently assisted a gym owner who needed to purchase new gym equipment to open a new gym location.
- Problem: A local gym owner was opening an additional location but needed to furnish it with new gym equipment, weights and machines.
- Solution: LendSpark approved and provided they gym owner with $250,000 in equipment financing to purchase the equipment needed to get his second location up and running fast.
- Result: The gym owner opened a beautiful new location in the heart of the city, on time, and to rave reviews from clients and media!
Equipment Financing Could be the Option for You
Equipment financing gives you numerous benefits, including low monthly payments, flexible terms, making upgrades easy, and can even qualify as a tax deduction for your business. If you’re still unsure whether or not you should lease or buy equipment for your business, call LendSpark today to speak with an expert.