In our industry, having access to the right equipment at the right time is crucial for success. Remaining competitive often requires regular upgrades, expansions and big-ticket purchases, however, and these solutions can be costly to implement.
One way to gain that competitive edge is by leveraging equipment financing. Getting a loan or a lease for heavy machinery can provide a host of advantages for business owners in a wide variety of valuable ways.
Consider these nine benefits of equipment financing:
1. Access to capital
An equipment loan provides a cash influx that allows business owners like you to buy the machinery you need to get the job done. In most instances, this is a fast and simple process, depending on your creditworthiness. A loan can help you free up other working capital that can be reinvested back into your company through payroll, marketing or other business needs. With relatively instant access to the money, it can also help reduce downtime by enabling employees to get to work faster.
2. Financial flexibility
Leasing machinery provides great financial flexibility for a company. Instead of the company having to part with a significant amount of capital expenditure, leasing payments are typically smaller and more manageable on a monthly basis. This shouldn’t disrupt cash flow as much since only a small down payment is usually required. Small- and medium-sized businesses can really benefit from not having to rely on big upfront payments for heavy equipment.
3. Stay on the cutting-edge
Equipment financing can also help you stay up to date on all the latest technological innovations and advancements available for your machinery. Upgrading equipment frequently can be a burden financially, which could cause some businesses to fall behind competitors. Equipment financing can make heavy machinery more affordable and offer you the means to acquire the latest and greatest tools on the market.
4. Extended protection options
With financing flexibility, business owners like you can often get more than just the equipment or the capital you need. Cat Financial also offers additional solutions such as Equipment Protection Plans, which allow you to choose from multiple coverage levels to protect your machine beyond the standard machine warranty, and it can be rolled into one monthly payment with your machine.
5. Adaptable terms and conditions
The terms and conditions of equipment financing are typically developed to align with the unique needs of your company. This means that the terms and conditions for equipment financing can be secured in a way that best fits your business, such as extending the contract term to reduce monthly payments. Then, when the total principal plus interest is spread across the predetermined period, you can have a better understanding of your long-term budget.
6. Tax savings
As a business owner, it’s important to understand the advantages of certain tax breaks available to your company. In certain circumstances, companies that finance their equipment can use Section 179 of the IRS tax code to deduct the full cost of equipment. In addition, businesses can typically deduct the interest paid in the United States. Be sure to review your tax savings options with your accountant to see if this is applicable.
7. Better business operations
Our flexible financing solutions are designed to get you the right equipment for the job, which in turn can help you improve business operations. Having the equipment you need on hand and ready to work can enable you to generate more revenue by bidding on more projects, adding new customers, and in some cases, securing larger deals that require more equipment.
8. Financing for rebuilding equipment
Purchasing new Cat® equipment is not an option for all businesses. With Cat Financial, qualifying customers can finance certain equipment rebuilds, which can be a cost-effective alternative to buying new
and allow you to extend the life of a machine you already own. Lean more about the rebuild special offer
9. Free up other lines of credit
A traditional business term loan is typically one of the first options a business owner considers when quick access to capital is needed to jump on an revenue-generating opportunity, bridge a slow period, or make an equipment purchase. However, having your line of credit tied up by a piece of machinery with your bank can limit your ability to draw upon that line of credit for other urgent or unexpected need. Financing the equipment through the manufacturer can help to free up that line of credit, leaving it available for other business needs.
Equipment financing can be a great option for companies of all shapes and sizes to help them grow their businesses and keep them flourishing. Contact your local Cat dealer to learn more about how your business can benefit from equipment financing and the options available.