Business equipment financing can be very helpful when you are expanding your business operations. Here’s why it can be the right choice to improve small business cash flow.
Business equipment financing can be the ideal solution to help your business grow. A lot of businesses need equipment, be it trucks, excavators, forklifts, tractors or other heavy commercial vehicles. However, the cash outlay on such equipment can be a major hit to a small business’s budget.
Take a look at why business equipment financing can give you a more flexible solution to help grow your store, service or venue.
What is business equipment financing?
Many small businesses need cash to survive. This is why many entrepreneurs may seek out business finance to purchase expensive equipment.
Just as you could take out a personal loan so that you could buy a car, business equipment financing can allow you to take out a loan to buy machinery, tools and more.
The process to access business equipment finance can be similar to applying for many other kinds of loans. You may need to meet specific requirements, such as you may need to share some information, explain what you need and prove you can make the repayments. You should always consider shopping around to ensure the business finance you apply for will suit your needs.
Benefits of business equipment financing
1. Manage your cash flow
Unless you have unlimited funds (and not many businesses do), attempting to pay for expensive equipment like high-end computers or earth-moving machinery upfront can put a serious dent in your income.
Once you are deeply out of pocket due to a major purchase, it can be hard to claw your way back.
With financing though, you may not need to be out of pocket to such a large extent immediately. You may also have control over your repayments. You can factor the repayments into your monthly budget to help you have better control of your small business cash flow.
2. Keep ahead of the competition
Ageing and outdated equipment can keep your business lagging behind the competition.
With many business equipment financing options available, you can help ensure you and your staff are working with the best equipment for the job. Leasing can be a particularly efficient way to stay ahead as it can allow you to update your lease equipment as newer models or technology are released.
3. Tax benefits
Small business tax benefits may be another reason to choose business equipment financing.
Getting the best tax breaks for your small business can be an essential move in staying ahead financially.
Many businesses can claim deductions on depreciation and interest paid, and claim GST-related credits. Make sure you consider talking to your lender and your accountant to establish what small business tax claims your business may be able to make when you borrow to purchase equipment.
4. Advice from Professionals
Another clear advantage in using business equipment financing can be the access it gives you to business specific lending advice. Choosing the right equipment for your business can be tricky but an experienced lender should have spoken to many people in similar situations to you.
Save time and trouble of researching equipment for your business and let your lender help steer you in the right direction. You might get some helpful business building tips along the way.
Business equipment finance options
When you are ready to find finance for your business equipment, there are likely to be plenty of options open to you.
A major bank may seem like the most obvious place but they are not always as flexible and they may hesitate if you have a bad credit record.
Make sure to look for lenders with great customer service reviews as well as competitive interest rates, and don’t forget to read the fine print so you understand the terms of your loan.
Finance One Commercial is a non-bank lender that provides opportunities for Australian small business owners to access business equipment finance. Get in touch to find out more.
Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information.