The Equipment Leasing and Finance Association (ELFA) estimates that eight out of ten U.S.
Equipment financing is a popular way to maximize your purchasing power largely because it is a cost-effective way to obtain the newest equipment without a large outlay of cash.
Financing also helps shield you from the effect of equipment obsolescence, a real issue for all those using any type of technology asset. It’s easy to add the latest software version to your master lease so you don’t have to worry about working with outdated technology.
Some of the recognized benefits of financing technology equipment include:
• Reduced Tax Burden - The IRS does not consider certain leases, for example, to be a purchase, but rather a tax-deductible overhead expense. Therefore, you may be able to deduct the lease payments from your corporate income.
• 100 percent financing – Some financing options require very little money down - perhaps only the first and last month's payment are due at the time of the acquisition.
• Immediate write-off of the dollars spent - With some financing options, payments can be treated as expenses on a company income statement, so equipment does not have to be depreciated over the useful life of the equipment.
• Flexibility - As your business grows and your needs change, flexible financing options provide more opportunities for businesses to add or upgrade equipment during the lease term.
• Asset management – Financing provides the use of technology equipment for specific periods of time at fixed payments. With some financing structures, the finance company assumes and manages the obsolescence risk of equipment ownership. At the end of the finance terms, the financing company is responsible for the disposition of the asset.
• Upgraded technology – Equipment that is frequently updated, such as software, should be financed to limit your risk of being stuck with obsolete equipment. It’s easy to add the latest software version to your master lease, for example, so you don’t have to worry about working with outdated technology.
Equipment financing is a popular way to maximize your purchasing power largely because it is a cost-effective way to obtain the newest equipment without a large outlay of cash.
Financing also helps shield you from the effect of equipment obsolescence, a real issue for all those using any type of technology asset. It’s easy to add the latest software version to your master lease so you don’t have to worry about working with outdated technology.
Some of the recognized benefits of financing technology equipment include:
• Reduced Tax Burden - The IRS does not consider certain leases, for example, to be a purchase, but rather a tax-deductible overhead expense. Therefore, you may be able to deduct the lease payments from your corporate income.
• 100 percent financing – Some financing options require very little money down - perhaps only the first and last month's payment are due at the time of the acquisition.
• Immediate write-off of the dollars spent - With some financing options, payments can be treated as expenses on a company income statement, so equipment does not have to be depreciated over the useful life of the equipment.
• Flexibility - As your business grows and your needs change, flexible financing options provide more opportunities for businesses to add or upgrade equipment during the lease term.
• Asset management – Financing provides the use of technology equipment for specific periods of time at fixed payments. With some financing structures, the finance company assumes and manages the obsolescence risk of equipment ownership. At the end of the finance terms, the financing company is responsible for the disposition of the asset.
• Upgraded technology – Equipment that is frequently updated, such as software, should be financed to limit your risk of being stuck with obsolete equipment. It’s easy to add the latest software version to your master lease, for example, so you don’t have to worry about working with outdated technology.
• Improved cash flow – Many finance structures can result in a lower monthly payment when compared to a standard loan. In addition, some finance companies offer seasonally adjusted payments to match a company’s needs.
Finance Services Too
Training, support and other services are vitally important to a successful technology implementation, yet they are some of the most overlooked costs involved with a technology acquisition.
Training, support and other services are vitally important to a successful technology implementation, yet they are some of the most overlooked costs involved with a technology acquisition.
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