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New Startup? Consider Financing Your Equipment

The US economy is proving to be quite a challenge to most businesses today. But the current state of the economy poses even more challenges to business startups who are trying to establish themselves. That is why it’s important for startups to understand their options for financing the equipment needed to operate and grow.

If you are in the planning stages of launching your new startup, you should know that acquiring the equipment you need through equipment lease financing provides you with the flexibility you need to meet your unique business needs. In other words, equipment financing is ideal for startups like yourself that may run into problems getting a traditional bank loan. When you finance your equipment, you won’t have to provide a bank with two years worth of financial information which is what most require today. This proves very beneficial because if you’re like most startups, you simply don’t have two years worth of financial info to provide a bank. Here are a few clear benefits associated with equipment financing.

It’s Possible to Obtain 100% Financing with 0 Down
Unlike most banks, leasing companies which offer equipment finance options often provide startups with 100 percent financing of equipment with no down payment required. This is a great advantage to you as a startup because it’s likely that you have very little cash flow available to use as a down payment. And, when you have the option of holding onto the cash you do have, you will be able to put it to good use elsewhere. For instance, instead of having to use a few hundred dollars for a down payment on a new office copying machine, you could instead spend that money on advertising and marketing your new business so that consumers know where you are, what you’re about and what you’re offering.

Avoid Outdated Equipment
Leasing your equipment saves you the cost and headaches of maintaining and eventually disposing of older equipment. Being able to make upgrades to newer equipment as necessary when your lease is up can provide your business with a clear, competitive edge. But when you buy equipment outright, you’re stuck with it unless you’re able to sell it. In short, if your new startup will be using equipment that’s periodically updated with improved technology and capabilities, financing your equipment is definitely the way to go.

Attractive Tax Benefits
Equipment lease financing offers you some great tax benefits. The Internal Revenue Service allows lease payments to be fully deductible if your business uses the equipment. You can deduct up to a half a million dollars worth of new and used business eq equipment under the Section 179 tax provision.

You Can Save Your Business Credit
As an up and coming entrepreneur, you are certainly aware of how important it is to keep your business credit line healthy and open. When you require money down the road for expansion, personnel or for other crucial operational aspects of your business, you’ll need good credit. Equipment financing will keep your business credit favorable and open so that you can strengthen your cash flow when need be.


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