What Are The Advantages of Equipment Financing?

There are many advantages to equipment financing, leasing or short-term lease. Over 80% of small businesses nationwide utilize some form of funding and big part of it is for equipment loan for new or used heavy equipment, trucks, machinery, delivery fleet or office equipment.

Besides the tax benefits, being cash flow friendly, leveraging fixed assets is one of the reasons big companies lease their equipment most of the time rather than using cash to pay for fixed assets.

Additionally, equipment financing or equipment leasing requires very little capital outlay. It can be great to avoid obsolescence. It’s perfect for cash flow management. Businesses with finances that compare to those who pay cash usually stays in business longer and can sustain downturn better because fixed assets that are essential to the business can’t be liquidated to free up cash. Rather than tying up all the liquid cash into fixed asset, cash allows you to maneuver your cashflow better to deploy it where it yields you higher rate of return for your cash.

You can always make low monthly payment and conserve cash for cash flow to operate the business while utilizing equipment financing while keeping your equipment at work.

It’s hard to liquidate a depreciating asset. Smart business owner will let the equipment pay for itself while it generates revenue or create savings.