Equipment Finance

Equipment Finance is the perfect solution for cash-strapped businesses that wants to add valuable equipment for an office, construction business, or retail outlet but can't afford the up-front costs. Equipment finance allows you to spread your payments out over time and potentially own it at the end of term. With equipment finance, you can bring new equipment into your business such as office furniture, computers, copy machines, and construction vehicles; without having to allocate much of your available cash flow. Equipment finance gives you the flexibility to use your funds to grow your business in other areas.

For the most part, there are many similarities between the various types of agreements that companies will allow for equipment finance. It's typically an expensive purchase, at least $5,000, for a physical product and something that can be repossessed if payments aren't made on time. Businesses that use equipment finance have distinct advantages that make it a worthwhile investment. Among them:

• Small initial investment: While you still must come up with some cash for application and set up fees, it's still significantly less than a large equipment purchase or the costs of securing a bank loan.
• Never fall behind the times: Since some equipment financing terms can be for just a year or two, you'll be able to upgrade to better equipment on a regular basis.
• Tax privileges: Some types of equipment finance will allow you to deduct all payments towards the lease as a business expense.
• Improves business cash flow: By not paying a large sum of money up front for your equipment, you can keep more cash in-house and have more cash flow to reallocate towards other areas of the business.
• Better financing options: Don't need a lengthy (or strong) financial history to get a equipment finance. This is very important for the newest of businesses that might be very credit worthy, but haven't been around long enough to establish themselves.
• Latest and greatest: By leasing equipment, you don't have to worry about equipment obsolescence - you get the most modern equipment right away!
• Increased purchasing power: Use your resources more effectively to get high-quality equipment and furniture you may not be able to afford outright.
• Potential tax breaks: With some equipment financing you can write-off lease; always check with your accountant first before taking any assumed tax credits.

Leasing drawbacks
Having these benefits for equipment finance may sound great, but as with any other major purchase, you also have to keep in mind the potential downsides. If your business takes a turn, you will have to break your equipment finance agreement and you may have to pay fees. The first is that you'll pay considerably more for the equipment over time because of the interest rates and payment. You can get the tax benefits, but only if you don't plan on owning the equipment outright at the end of term.

Another disadvantage to equipment finance is you decide at some point that you no longer want to lease the item. Say you either find one at a great price or your company doesn't need it anymore. Unless it's specifically written that you can opt-out of a lease agreement, you may have to pay significant penalties to the lender if you break it. This is why it is important to look into 1-year leasing agreements so you don't get locked into a contract that isn't' feasible for your company. To find the best rates on the equipment financing options work with local vendors. The companies that actually sell the products usually offer you the financing packages which will make it easier on you to acquire the equipment and forego the shipping cost.

Corporate Credit Concepts specializes in equipment finance. For more information about how equipment finance might benefit your business, please CLICK HERE for a free phone consultation.

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