Is a Business Equipment Loan for You?
When you need equipment for your business, leasing business equipment and buying outright are your two options. Leasing offers several benefits, but you want to see what a loan can do too so that you make the best choice for your business.
It is Time to Make Repairs or Do Maintenance
While it is important to do regular maintenance and make all repairs regularly, there comes a time when equipment is just not responding to these the way it used to. In this instance, it is time to get new equipment and this can actually save you money since making repairs and maintaining equipment more often than usual increases your overall operating expenses. A loan helps you to secure new equipment that will replace the old so that you get more mileage out of the equipment you are using.
Help with Your Taxes
In some cases, using a loan to buy equipment instead of leasing business equipment makes more sense when you file your taxes. You may be able to write off more of the equipment costs when you are actually purchasing it instead of leasing. Your accountant can help you to determine how much you can save.
You Need Newer Equipment to Best Serve Your Clients
Almost all equipment will eventually become outdated and when you are working with outdated equipment, this can hinder your overall productivity. Lower productivity means unhappy customers and you will be spending more money just to keep up. Getting a loan can help you to secure newer equipment so that you can more easily keep up with the demands of your business. This is especially important in the construction and healthcare industries.
The Repayment Terms of the Loan Are Better Than the Leasing Terms
If you are currently leasing business equipment, look at the terms you have with the leasing company and compare them to the terms you will have with a business equipment loan. If you can save some money with the loan, this can help to improve your cash flow and overall cash on hand. You want to reduce the money you pay out each month to operate your business while getting the most for the operating costs that you do spend.
Now that you have more information on using a loan, you must decide if purchasing or leasing business equipment is best. Explore your budget and the overall financial stability of your business to help you to make the right decision.