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When most small business owners think about financing equipment, they typically think of going to the bank and applying for a loan. However, there is another option that is becoming increasingly popular: equipment financing. Equipment financing is a type of leasing that allows businesses to acquire the equipment they need without having to take out a loan or tie up working capital. Here are just a few of the many benefits of equipment financing for small businesses:
Preserve Working Capital - One of the biggest advantages of equipment financing is that it allows you to preserve your working capital. Since you are not using your working capital to purchase the equipment outright, you have more flexibility to use it for other purposes, such as marketing or payroll.
Improved Cash Flow - Another benefit of equipment financing is that it can improve your business's cash flow. When you finance your equipment, you make fixed monthly payments over the term of the lease. This can help you better forecast and manage your monthly expenses, as opposed to making a large lump-sum payment upfront.
Tax Advantages - In many cases, you may be able to deduct your monthly equipment lease payments as a business expense on your taxes. Consult with your accountant to see if this applies in your situation.
Flexible Terms - With equipment financing, you can select terms that fit your budget and cash flow needs. You can also choose to upgrade or trade-in your equipment at the end of the term for newer models, which can be especially beneficial if you're in a rapidly changing industry.
100% Financing - In some cases, equipment financing companies will finance 100% of the cost of the equipment, which means you don't have to put any money down upfront. This can be helpful if you don't have extra cash on hand but still need to acquire new or replacement equipment for your business.
What is the process for applying for equipment financing?
Applying for equipment financing is a relatively simple process. First, you'll need to find a lender that offers this type of financing. National Legacy Capital Group offers a variety of equipment financing solutions for small businesses. We have a team of experienced financing experts who will work with you to tailor a solution that meets your specific needs and budget.
The next step is to fill out an application. The application will ask for basic information about your business, such as your annual revenue and the type of equipment you need to finance. You'll also need to provide some financial documents, such as your most recent tax return.
Once you've submitted your application, the lender will review it and make a decision. If you're approved, you'll be able to sign a loan agreement and get the financing you need to purchase your equipment. The entire process can take as little as a few days from start to finish, so you won't have to wait long to get the equipment your business needs.
Bottom Line
If you're a small business owner in need of new or replacement equipment, consider financing it instead of taking out a loan. Doing so has a number of advantages, such as preserving working capital, improving cash flow, and providing tax advantages. Plus, with equipment financing, you can usually get 100% financing and flexible terms that work well for your budget and cash flow needs.
Contact us today to learn more about our equipment financing options and how we can help you grow your business.
