If you’re in an industry that requires your company to get updated equipment regularly in order to remain competitive, you know that constantly replacing old equipment can quickly become prohibitively expensive. Even though the current environment for small businesses makes getting cutting-edge technology and staying one step ahead of the competition well worth it, paying for all the new equipment can put a significant dent in any company’s budget. If this is the case for your business, you may want to consider getting equipment financing, which can help you access equipment when you need it. If you’re still not sure, consider these three great benefits financing equipment can have for your business.
1. You Can Stay Cutting-Edge
When you have to save up to buy equipment outright, you might not be able to afford upgrades until industry trends have already moved in a new direction. When you get financing, though, you can stay up-to-date with your sector’s standards without having to invest all your capital in an asset that could quickly become outdated. This also helps mitigate the risks associated with ownership, like not getting the return you’d hoped for.
2. You Can Keep Cash Flow Steady
When you pay for equipment all at once, you sink a large chunk of cash into a single asset, disrupting your company’s cash flow. Getting equipment financed, on the other hand, allows you to maintain a much steadier cash flow over the course of several months or even years. This allows you to budget for your equipment payments as a regular, fixed expense.
3. There May Be No Down Payment Required
Part of being able to afford traditional financing is saving up for a down payment, usually of about 10%. With some types of equipment financing, however, you may be able to finance 100% of the purchase, meaning you won’t have to put in a down payment at all. This could allow you to focus your cash on other areas that need it, such as inventory, marketing or growth.
In today’s competitive business environment, staying on top of the latest industry and technological trends is imperative. Paying for constant equipment upgrades, however, can quickly become too expensive for many businesses. Before you quit and just stick with your old equipment, however, consider whether equipment financing could help you access the tools you need without having to pay in full up front. With benefits like the ones listed above, the decision could be well worth it in the end.