Using Cash for Stability, Recovery and Growth
Even if a business can afford to pay cash for equipment, doing so ties up funds that could be used for higher-value purposes. By broadening your financing mix, you can keep more cash working for you.
Staying up to Date
Technology changes fast, and some financing methods can’t keep up. Cash or revolving credit may not be best for acquiring equipment that depreciates quickly. Why make it difficult to upgrade and stay competitive? For equipment like this, paying to use it with financing, rather than paying to own it, may make more sense.
Reducing Credit Exposure
Credit is one of those things that are better to have than need, but when you need it, you need it. Having multiple financing methods available lets you keep more of your credit lines open and ready. Not only does this prepare you for unexpected expenses and unstable economic conditions, but lower credit utilization can also improve your credit rating.
Managing Taxes
Depending on your situation, it may be advantageous to depreciate equipment year by year, expense it month by month, or take a lump-sum Section 179 depreciation. Having a broad mix of financing allows you to manage equipment acquisitions in a way that’s most favorable from a tax standpoint.
Gaining Better Control of Your Budget
Some financing methods give you options such as deferred-, step-, and seasonal-payment options to help you address business cycle fluctuations with minimum impact to your budget. Cash flow is king in all economic cycles, but especially when the marketplace is changing rapidly.
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Some financing methods give you options such as deferred, step, and seasonal payment options to help you address business cycle fluctuations with a minimum impact to your budget. Cash flow is king in all economic cycles, but life-sustaining in challenging times.
Gaining Better Control of Your Budget
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Depending on your situation, it may be advantageous to depreciate equipment year by year, expense it month by month, or take a lump-sum Section 179 deduction. Having a broad mix of financing allows you to manage your equipment acquisitions in a way that’s most favorable from a tax standpoint.
Managing Taxes
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Credit is one of those things that are better to have than need, but when you need it, you need it. Having multiple financing methods available lets you keep more of your credit lines open and ready. Not only does this prepare you for the unexpected and unstable economic conditions, but lower credit utilization can also improve your credit rating.
Reducing Credit Exposure
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Technology changes fast, and some financing methods can’t keep up. Cash or revolving credit may not be best for acquiring equipment that depreciates quickly. Why make it difficult to upgrade and stay competitive? For equipment like this, paying to use it by financing it, rather than paying to own it, may make more sense.
Staying up to Date
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Even if a business can afford to pay cash for equipment, doing that ties up funds that could be used for higher-value purposes. By broadening your financing mix, you can keep more of your cash working for you.
Using Cash for Stability, Recovery and Growth
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