Every business needs high-quality state-of-the-art equipment to remain competitive in their industry. However, most equipment is extremely expensive, and many companies cannot afford such a large upfront payment. Equipment financing involves taking out a loan with manageable payments using the equipment as collateral. With equipment leasing you rent the equipment instead of purchasing it; at the end of the lease, you have the choice of returning the equipment, extending the lease, or buying the equipment. Here are some advantages of equipment financing or leasing for your business.

Free Working Capital for Other Needs

When you purchase the equipment outright, the amount of working capital you have available to run your business greatly decreases. With equipment financing or leasing, you make smaller monthly payments that you can easily afford, and your cash flow stays strong. Additionally, equipment financing does not tie up your credit as a business term loan does; if after you acquire your equipment you need more funding, you can still apply for a term loan.

Apply Quickly and Easily

The application process for equipment financing is generally easy and quick, especially if your credit is strong, your business is well-established, and the equipment you require will remain valuable. You can often receive an answer within a day, although big-ticket items valued at $200,000 or more may take a little longer.

Keep Your Equipment Up-to-Date

The expense of new equipment often precludes businesses from obtaining upgrades, even though owners realize that cutting-edge technology will keep them at the forefront of their industries. With equipment financing, though, you can get the latest and the best equipment at a cost you can afford.

Obtain Tax Breaks

Both equipment financing and equipment leasing offer tax benefits to business owners. When you finance your equipment purchase, the interest on the payments is tax-deductible. When you lease equipment, you can claim all of your lease payments as business expenses.

For more information about acquiring equipment through equipment financing and leasing, contact Jasema Capital.