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Equipment finance 101: Benefits worth considering

By Amy Thomas in General, Thought Leadership Posted August 28, 2018

Ask yourself: Why do businesses ranging from mom-and-pop operations to Fortune 100 companies finance their equipment? The answer: Equipment financing gives them access to a wide range of benefits. 

In fact, the list is long when it comes to describing why it's a smart strategy to explore equipment finance. But let's start with a few: Equipment financing offers distinct advantages to businesses needing to upgrade their equipment or acquire the latest technology to compete in their markets. It also helps them leverage tax considerations and equipment financing expertise, as well as outsource asset management and avoid getting stuck with outdated equipment.

Watch the video

This video by Equipment Finance Advantage provides an overview of why equipment finance is more than an equipment solution for your business. Take a look: 

 

Before you wade into the equipment financing pool, however, it's important to have a high-level understanding of the options and benefits. With equipment financing, you can:

Learn more about the advantages of equipment financing from EFA

100% financing

Get 100% financing with no down payment - Unlike requirements of most traditional lenders, you may be able to arrange 100% financing of equipment with no down payment.  

Maintain cash

Equipment financing is a source of funding that lets you hold onto your cash or working capital so it can be used in other areas, such as research, expansion and improvements. 

Manage risk

Equipment financing can help mitigate the uncertainty of investing in a capital asset, saves costs and increases efficiency.

Hedge against inflation

Equipment financing may hedge inflation risk because instead of paying the total cost of equipment up front or with a large down payment in today's dollars, the stream of payments delays your outlay of funds. In addition, either a lease or loan can lock in the rates that exist on the date of the closing. In other words, the finance company absorbs the devaluation of your payments over time due to inflation and other financial risks.

Plan expenses for cash flow and business cycle fluctuations

Financing equipment helps maintain cash flow and greater certainty in budgeting by setting customized rent payments to match cash flow and even seasonal cash flows.

There are even more aspects to consider.

Take the next step:

Learn how equipment financing works

 

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