The Tax Cuts and Jobs Act of 2018 (TCJA) is positioning manufacturing businesses for growth and profitability but also requires fresh analysis when it comes to equipment acquisition strategies.
Tax reform is bringing many changes, but the tried-and-true benefits of leasing equipment remain unchanged. Equipment financing continues to provide:
- Enhanced cash flow, allowing you to avoid large out-of-pocket costs and effectively manage cash from operations;
- Unparalleled flexibility and asset management features, including options to keep equipment in place for the long haul or upgrade to the latest technology; and,
- Preservation of credit lines to support day-to-day business operations rather than long-term capital needs.
While the benefits of equipment financing continue, it’s important to consider how tax reform is changing the playing field, whether continued tax savings, historic changes with major impact or other scenarios.
Here's more from a recent article by Key Equipment Finance's James B. Eulenstein for the Council of Industry: