While a lot of borrowers have the cash to pay for their equipment outright, there are many, potentially overlooked reasons why financing may provide better benefits. Whether it’s being conservative with the money you have available, or just a financing trick to save you money, just because you can buy, doesn’t mean you should, and we can help you find the solution for your situation. Here are some financing factors to consider when it’s time to buy your equipment. Conserve Working Capital It’s always been said, cash is king, and keeping it around is never a bad idea. You can never have too much cash around, it makes it immensely easier to cover unexpected costs and provides security that financing just can't match. Financing will accomplish the purchase just as well, and you will have more flexibility with your money than before. The Equipment Pays for Itself With interest rates being at a remarkable low at the moment, monthly payments are affordable, and your equipment is more than likely to pay for itself each month with the work you do with it. Taking advantage of low rates is pervasive across many industries right now, and that extends to your equipment purchases as well. Lower cost is often a reason cited for paying up front, but
at the moment with the rates at the point they are at now, that platitude may not hold true.
Financing equipment allows for companies to better manage their balance sheets, giving them fixed monthly costs while also allowing for a larger sum to spend from as needed. While buying up front leaves no debt to be accounted for, it does decrease the budget flexibility at your disposal essentially due to lack of funds.
Financing helps your business to establish long term commercial credit that could be of use down the line. This is always a great resource, but holds extra importance for those who look to continue to grow their business, and at some point will need other methods than cash to support their new ventures, equipment, and opportunities. Financing can help you in the future, especially if you have your mind set on growth!
If you have the cash available, it can certainly be less work to front the cost entirely. However, at this time, financing is a great tool to allow you flexibility and dynamism with your money.
Purchasing based on need, and accepting a slightly higher price may seem unattractive, but in the long run there are plenty of benefits to be had. You’d be surprised how affordable this process can truly be.