I am sure you have heard that old saying: “I don’t buy unless I can afford to pay for it”? In the old days, it made sense. However, if you can afford it, that doesn’t mean you need to use the cash in your wallet to pay for it.
Unfortunately, many people live by these words and as a result, miss out on opportunities to acquire the equipment their company needs. Most of the clients BNC Finance works with use financing to support their long term cash flow objectives. Financing can be utilized for long term growth objectives and increased Return on Investment. Here are five reasons our customers take advantage of financing – rather than opening their wallets – when looking to acquire equipment. These benefits can be realized by all industry types.
1. Safety Net
Conserving cash is one of the most important aspects of running a business. Cash is the lifeblood of a business, it only makes since to manage it wisely for unexpected emergencies or business opportunities. As any business owner knows, it can be difficult to find room in a budget for equipment expenditures among other fixed expenses (payroll, office space, etc.) and unexpected expenses (repairs, surprises during a contract, etc.). As the old saying goes, “Cash is king!” Equipment Financing & Leasing allows you to conserve capital and build a safety net.
2. Immediate Income
Buying equipment has an immediate negative impact on cash flow because of the need to make one large payment upfront. Financing & Leasing equipment has only a slight impact on cash flow because small monthly payments are made over time. With a low monthly payment, you can start earning immediate income from your acquisition.
3. Pursue better opportunities
Financing allows you to buy the equipment best suited for the project and not best suited for your budget. Rather than individually buying new equipment in full, which can be expensive and inefficient, leasing allows a company to use up-to-date technology and equipment without paying for it all at once and risking the health of their cash flow.
4. Establish Credit
For new or established businesses, financing enables you to build up comparable credit. When you are looking to borrow money lenders look at the history of what you have borrowed in the past. If you do not have comparable debt you will not qualify for the loan. If you have the history it will be easier to access larger amounts of capital. Having quick access to large amounts of capital will allow you to pursue any large opportunities that may arise.
5. Reduce Taxes
If business is going well you want to minimize your taxable income, certain leasing contracts allow you to generate some additional expenses you can write off against your income. Make sure to reach out to your accounting professional because you could be missing out on some opportunities to save money. Learn more about Tax savings by watching the video " What is Tax Code Section 179"
Whether you’re a small, new, or established business, reconsider your cash purchases of equipment. Get the best equipment suited for your business while conserving capital with flexible financing and leasing options through BNC Finance Apply Now