Every company understands the importance of purchasing, upgrading, and replacing essential equipment that is vital to daily business operations. It is difficult to invest in machinery during times of unprecedented cash flow strains, such as a pandemic. Businesses can use equipment financing to improve their operations and avoid stressing cash reserves. They also get tax benefits.
What’s Equipment Financing?
Equipment financing allows you to finance the purchase of machinery by borrowing advances from financial institutions. You can use the asset to purchase specific equipment, such as ovens for restaurants, heavy machinery for agriculture, or generic equipment such as vending machines or laptops. Many businesses can benefit from equipment financing to increase productivity without having to invest large amounts of capital upfront.
An equipment loan does not require additional collateral as the collateral is the asset being purchased. Equipment financing is an affordable and cost-effective way to purchase business equipment.
These are seven reasons to get equipment finance Sydney broker for your business
1. Cashflows Are Easy
Equipment Financing allows enterprises to acquire assets without having to invest large amounts of capital upfront. Instead, the equipment’s costs are spread over its life as monthly instalments or rental leases. This makes it easier for businesses to recover from nationwide lockdowns.
2. No Dilution In Ownership
Equipment and machinery are essential to the smooth operation of any business. Equipment financing allows you to access the necessary funds while also ensuring that the asset’s owner is your business, giving you full control of your business operations.
3. Maintain Debt Raising Capacity
2022 will be a year of uncertainty after the COVID-19 pandemic. Companies must be open to all options to weather the uncertain course of the economy. Equipment financing does not require additional collateral. Your balance sheet and residual assets will remain intact. This financing will not affect your future ability to raise debt.
4. Boost Productivity
Companies must focus on increasing revenue and regaining business losses without affecting current business operations. To ensure the company’s future, it is important to use the latest technological advances with maximum efficiency. These investments can be made with minimal upfront capital, allowing for increased productivity and the possibility of reviving the company through equipment financing. Sydney Brokers has the best equipment financing options on the market thanks to its wide reach and many OEM partnerships.
5. Reserves In Excess To Cover Contingencies
A business can have excess liquidity and cash in case of unanticipated circumstances when it obtains equipment financing. This would increase the availability of funds for contingency in case of unanticipated events.
6. Tax Savings
Tax planning may be a top priority as the financial year draws to a close. Equipment financing and leasing offer many tax benefits for companies. Lease rents are tax-deductible and help reduce taxable income. These savings can be used to scale up the business. For step-by-step guidance on tax planning, reach out to Sydney Brokers tax experts.
7. Protect Against Obsolescence And Inflation
Equipment financing helps protect long-term investments from price rises. You can protect your business from a possible increase in price by locking in a long term lease or financing option. These savings can help reduce the cost per unit as well as improve margins. These savings can be used by enterprises to make their operations more efficient.