Buying the vehicles and equipment you need is both an important first step and an ongoing expense, meaning that the method you use to pay will have short-term and long-term effects on your business. Paying with the cash you have on hand seems like a simple, safe choice over financing – but is it really the best option?
Financing your equipment isn’t simply a way to pay. It’s an investment that allows you to:
Spread out your spending.
Your equipment is essential, but its hefty up-front costs and rapidly-depreciating value can leave you at a financial loss if you choose to pay in cash. Financing relieves you from those burdens, allowing you to pay only for what you need and eliminate the asset when it’s no longer useful. The capital and cash you save can be funneled into more profitable aspects of your business, such as marketing or investment.
Make budgeting easy.
Dropping a large sum all at once leaves a hole in your bank account that can be difficult to climb out of, and that’s exactly what you’re doing when you pay for equipment and vehicles with cash. A financial plan will spread out your payments in smaller increments over several months, giving you long-term financial security in case of an emergency.
Use your time wisely.
The old adage “time is money” rings true when you consider that every moment you spend without the equipment your business needs is a moment you’re losing profit. Accumulating enough cash to pay for capital can take months, and the inability to keep up with fast-paced upgrades can leave you with outdated machinery. Financing will keep your business ahead of the clock, providing you with the most profit in the long run.
Reap the benefits.
Financing opens you up to tax deduction opportunities unavailable for equipment purchased fully in cash. Ask any accountant about Section 179 of the US tax code – your capital can save you a great deal of money when tax season rolls around.
Buying with cash may seem like the smartest immediate solution, but if you’re a business owner who’s concerned with your future, financing your vehicles and equipment is an investment that pays.
With 120 years of combined experience, the executive team at Madison Capital will ensure that your financial plan maximizes your profit for years to come. Contact us today to get started.