12 Benefits Of Financing Equipment For Concrete Production
Why do businesses ranging from mom-and-pop operations to Fortune 100 companies finance their equipment? It’s because of access to a wide range of benefits. With equipment financing, you can:
1. Get 100 Percent Financing With No Down Payment
Unlike the requirements of most traditional lenders, you may be able to arrange 100 percent financing with no down payment. This is key if cash flow is a concern.
2. Maintain Cash
Equipment financing is a source of funding allowing you to keep cash and/or working capital available for other areas of the business. Common examples include:
- Marketing; and/or
- Research and development.
3. Manage Risk
It can help mitigate the uncertainty of investing in a needed capital asset until the equipment achieves a desired return, increases efficiency, reduces expenses, and/or meet other objectives.
4. Hedge Against Inflation
Instead of paying the total cost of equipment upfront or with a large down payment in today’s dollars, the stream of payments delays your outlay of funds. Besides, a lease or loan can lock in existing rates on the closing date.The finance company absorbs the devaluation of your payments over time due to inflation and other financial risks.
5. Plan Expenses For Cash Flow And Business Cycle Fluctuations
Financing helps maintain cash flow and greater certainty in budgeting by setting customized rent payments to match cash flow and even seasonal cash flows.
6. Keep Up To Date With New Technology
Leasing, loans, or other financing frequently enables you to acquire more and better equipment than you otherwise could have. Certain leasing programs allow for technology upgrades and/or replacements within the contract term.
7. Address Tax Considerations
Tax-oriented leases, a transaction that includes the value of tax benefits, should produce lower rents since the lessor retains title and depreciation. Conversely, a conditional sale or loan enhances tax benefits of higher deductions to the lessee/borrower.
8. Leverage Equipment Expertise
The financier can be a valued consultant, providing benefits that range from setting residual rates through lifecycle asset management solutions.
9. Avoid Getting Stuck With Out-Of-Date Equipment
When a lessor owns the unit in a true lease, the lessor bears the risk of the equipment used by a business from becoming obsolete.
10. Outsource Asset Management
Many financing companies provide asset management services that:
- Track the status of equipment;
- Know when to upgrade or update units; and
- Provide services relating to installation, use, maintenance, de-installation, and disposal of the equipment.
11. Obtain The Convenience Of Product & Service Bundling
Certain products allow customers to finance the entire equipment cost, including installation, up-front maintenance, training, and software charges. This packages systems and ancillary products and services into a single, easy-to-manage solution.
Equipment management by a third party should enhance the ability of a business to focus on its core operations. In the case of computers and other devices, these companies may also agree to dispose of equipment. This service can prevent the lessee or borrower from incurring legal penalties for improperly disposing of such assets because disposal is often regulated by federal, state and local governments.