Small business owners are often looking for ways to save money that doesn’t restrict their opportunities for expansion. Investing in new technology and equipment is one of the most effective ways to improve business. However, investing in technology or purchasing new equipment can be quite the expensive endeavor for small businesses. Most small businesses make the mistake of not doing their due diligence when it comes to diversifying their lending portfolio or simply refuse to consider financing. The best way to increase revenues, reduce tax burden, and keep up with new technology and machinery is equipment leasing. Leasing capital equipment helps keep expenses low, while staying up to date with competitors. Still not convinced?
Here are just a few of the many benefits of equipment leasing:
1. Reduce costs
Let’s be real, equipment can be expensive and it can be frustrating to spend large sums of money on new tech solutions that will either be soon obsolete or be outdated and require a costly upgrade.
With equipment leasing, despite the stigma regarding financing, company leaders save money by avoiding to pay significant upfront costs, thereby reducing expenses. Furthermore, if a business owner is on the fence about investing in new technology, they can test out equipment without having to fully commit to a product. If, at the end of the lease term, they have decided they would rather go another route, business owners are free to do so and look around for other options.
2. Opportunity to upgrade
However, if the business owner liked the product but it’s now fairly outdated, another added benefit of equipment leasing is the option to upgrade to new or updated machinery, materials or accessories.
It’s a common grievance for all companies that after several months or even a year after purchasing equipment, it seems to have been replaced by a better version, making their current materials seem antiquated by comparison. To give you an example; Apple’s iPhones.
Therefore when a company chooses to lease instead, they avoid the buyer’s remorse of now owning an outdated product because they can simply contact their provider and upgrade to more advanced options. Leasing equipment helps small business owners stay on top of costs while getting to know new technology, beating other organizations to the chase.
3. Potential tax benefits
The most underrated advantage of equipment financing is hands down the tax breaks small business owners can enjoy when they opt to lease rather than buy. Under Section 179 of federal tax laws, the IRS has granted equipment leasing a tax exempt status. Better yet, the Section 179 Tax Provision allows companies to deduct as much as $500,000 for qualified new and used business equipment.
4. Repairs may be covered
Even when organizations are careful with their equipment, accidents can and do happen. When investing fully in new business materials, if something goes awry with equipment, companies must pay for repairs or replacements entirely on their own. Equipment financing lenders can take the burden of some of these costs, helping companies remedy equipment problems sooner rather than later. This way, businesses don’t have to spend exorbitant amounts of money or time trying to get back on track with operations and therefore falling behind their competitors in the process.
In summary these are just a few of the advantages of equipment leasing. If small business owners are interested in propelling their companies forward, they should contact Balboa Capital about leasing options today.
If you’re a small business owner and want to get ahead of your competitors, contact me at +1(949) 383-9354 and lets propel your business forward.