Benefits of Financing
Cash Flow is King
Effective cash flow management is extremely important element to a successful business – small or large. Equipment financing offers business owners a means to aquire equipment based on an operating budget – not based on capital or cahs on hand.
Equipment financing is an option which enables any business to aquire new equipment – or upgrade existing equipment while avoiding the inefficiencies of obsolescene. Financing also means posponing the ultimate purchase decision for a piece of equipment until the end of financing term.
ADDITIONAL BENEFITS INCLUDE:
- Tax Treatment – The tax incentives for purchasing new equipment have never been grater. By offering your customers a lease to purchase option, the amount they save in taxes could be greated that what they pay in the first year of a lease. Their new equipment could make them money for day one!
- 100% Financing – Since a lease ofter doesn’t require down payment, it’s equivalent to 100% financing.
- Flexibility – As business grow and needs change, the customers may be able to add or upgrade equipment at any point during the financing term.
- Asset Management – Financing provides the use of equipment for specific periods of time at fixed payments. The financing company assumes and manages the risk of equipment ownership. At the end of the term, if the customer elects to return the equipment, the financing company is responsible for disposition of the asset.
- Flexible End of Term Options – There are typicaly three flexible options at the end of a term. The customer can return the equpiment, purchase the equipment from the finance company or extend the financing for an additional period of time.
- Ability to adopt technology faster
- Frees bank lines of credit
- Provides an alternative credit source
- Improves cash forecasting and budgeting
- Retention of capital to generate earnings