Three Advantages of Financing Over Purchasing Equipment
Today, many businesses are leasing their equipment and machinery rather than purchasing it on their own. Equipment lease financing is a popular solution for general contractors, restaurants, medical offices, repairmen, IT services, hair stylists, and many more because of the benefits it provides small business owners. The following advantages leasing equipment has over purchasing makes it an important option to consider, especially in industries where having up-to-date technology can make or break business success:
Purchasing technology with cash upfront could leave a big hole in your budget. Your office could be left scrounging for weeks to make up for the payment. Office supplies, employee hours, or other expenses might be negatively affected, which can lead to a host of over issues.
Alternatively, leasing equipment allows companies to set a payment plan that works with their budget. Because many leasing companies offer 100 percent financing with no down payments, working capital can be preserved and monthly budgets stay consistent. You can hang onto your monthly profits and use them to reinvest into your business.
Also, by anticipating exactly how much they’ll be paying each month – even with the addition of new equipment – lessees have the benefit of cash forecasting. Budgets can be accurately assessed without fear of unknown costs in the future. Forget about the rainy day fund; upgrades, repairs, and future technology acquisitions can easily be worked into your budget.
Technology depreciates. Whether its medical equipment, computers, construction tools, printing gear other equipment your business utilizes, technology becomes outdated fast. Some products might be beefed up with enhanced features, while others are outright replaced by newer technologies. A cash purchase runs your company the risk of owning dated or obsolete technology. You’ll face the question of selling for a loss or bearing with the outdated products, which places many a small business owner between a rock and a hard place.
With the option of equipment leasing, a small business can avoid that question altogether. Short-term leasing means you can upgrade quickly, keeping you current with the latest in the industry.
Using outdated equipment can affect your sales and contracts. Patients may lose trust in doctors who use outdated machines or devices, rather, instead turning to those with the latest technologies. Leasing gives business owners the option of upgrading fast and acquiring new technologies as soon as they hit the market.
Using limited funds for a cash purchase could send you shopping in the bargain section. It might mean only half-furnishing your restaurant’s kitchen, or partially equipping your construction team. Limited investing could debilitate your company’s progress, causing you to lose out to your competition.
Equipment financing keeps many doors open. A wide array of new and used products are suddenly within reach. With leasing, investing fully in your business is much more affordable, bringing your productivity to its full potential.
If you think your company could benefit from equipment leasing, contact National Funding for information on products and leases. National Funding, a small business lender, provides equipment financing to over 100 different industries.