Do You Really Need to Buy Heavy Equipment?
There are a shocking number of small business in the U.S., and that number grows by 543,000 every month, according to Forbes research. Statistics show that 52% are home based, and that many have opted to take out loans. About 38% do so to maintain inventory and 33% do so to make up for unpredictable business inventory, but what about those that need capital just to get started? Heavy equipment loans are one way to procure what you need in order to run a business successfully. Here, we’ll look at ten reasons that commercial equipment financing might work well for you.
- Flexible financial solutions- Many companies offering heavy equipment loans offer flexible solutions that can be tailored to specific accounting, tax, or cash flow needs.
- Capital preservation- For many businesses, the opportunity to preserve capital makes heavy equipment loans an attractive option. Investing in large expenditures is a big financial risk, especially for a small business, but financing can help mitigate any uncertainty.
- Better expense planning- Cash flow maintenance and consistent budgeting is much easier for companies who take out heavy equipment loans. Instead of making considerable capital outlays, businesses can simply plan on steady monthly payments.
- Business cycle flexibility- Some equipment financing rates fluctuate depending on business success and season. If this is of major concern for you, be sure to look for equipment loan rates that are more flexible.
- Up-to-date technology- Having the newest heavy equipment is very important in some industries. While you might not be able to purchase outright the equipment you need, heavy equipment loans may be able to help you stay abreast of the changes.
- Equipment expertise- Some purveyors of heavy equipment loans are experts on certain specialties, even having special relationships with manufacturers and distributors.
- Managed obsolescence- The risk of owning obsolete equipment can be eliminated if you choose lease financing for your acquisition.
- Dependable asset management- This is a key benefit of many forms of equipment finance, ensuring that equipment in production is neither under- nor over-utilized. A quality program tracks equipment throughout its life cycle from delivery to de-installation.
- Equipment disposal- Most businesses don’t have the resources to efficiently manage and sell old equipment. When a third party manages it, however, businesses can instead focus on core operations.
- Reduced risk- Purchasing equipment instead of using heavy equipment loans poses a certain amount of risk to the owner. Financing, however, can remove many of those risks.
Knowing your options will enable you to obtain the most for your company without tying up your budget or your future. What’s important to remember is that you make money by using equipment and not by owning it.