Every company will have to spend money on equipment at some point or another. And even if you can find a great deal, it’s likely that this equipment will have an impact on your company’s finances. That’s why it’s important to think about how you’re going to finance your equipment purchases. While there are many options available, for most businesses, it’ll come down to paying for the equipment outright with cash or using equipment finance.
In this blog, we’ll run through some of the advantages of equipment finance.
Don’t Get Left Behind.
It doesn’t matter what industry you’re in: you need to be competitive. If you’re not, then you’ll run the risk of being left behind. With equipment finance, companies that may not have the cash flow to fund the purchase of the latest equipment outright can get access to the latest equipment. If you lease the equipment, then you’ll be able to update to the latest machines once the lease is up without negatively impacting your finances.
Protect Your Cash Flow
Even companies that could afford to purchase their equipment outright typically find that it’s better to use finance for the purchase. Why? Because if the equipment is expensive, then they could run into cash flow issues. Indeed, just one costly equipment purchase could cause a huge fluctuation in a company’s accounts; it could go from healthy to worrisome in a matter of seconds. When you use equipment finance, you’ll just be paying an acceptable amount of money each month, which will help you to keep a firm grip on your cash flow.
Maintaining Working Capital
Additionally, big expenses such as equipment can negatively impact working capital. While everything could be manageable on paper, the company could be just one unexpected bill away from falling into difficulty. It’s always important to maintain a healthy level of working capital when you’re running a business, but it can be hard to do so when you’re spending so much money to buy a piece of equipment outright.
It’s Easy To Do
It would make sense to buy equipment outright if equipment finance was difficult to access or overly complicated. But it is neither of those things. There are several different financial products available that you can use to finance equipment, including asset leasing, cashflow funding, and more. You can use this funding to purchase a variety of different pieces of equipment, including used and refurbished equipment, which can help to boost your finances even further.
It Can Happen Quickly
Finally, one of the unexpected benefits of equipment finance is that it can happen quickly. You can apply in the space of a day, and once you’ve gone through the straightforward application process and received your quote, you’ll find that you’ve got the money you need to purchase the equipment. If you need a particular item to help push your company forward, then this can be a much better option than spending months to save up the money needed to buy the equipment outright.