When business owners need to update equipment or technology to keep up with company expansion, they have the option to either lease or purchase. While there are plenty of perks to leasing, there are also advantages that only come with owning.*
Here are five benefits of purchasing and financing equipment:
1. Own the property to make modifications as needed
When leasing certain assets, there are usually restrictions on modifying this machinery because someone else has full ownership. With a small business loan to purchase items, the company still owns this property after the loan is paid off. This allows them to tinker with the items to update them as necessary. If the technology needs repairs, rather than wait for the green light from its owner, the company can decide on how to fix it, according to QuickBooks.
2. Ability to sell assets to recoup the cost
When deciding they no longer need certain owned items, businesses could sell them. This can get back some of the money they put in. Operators could then take the proceeds recovered from the sale and use it for a down payment on other tools. However, this is not an option for leased machinery as you have to keep paying on the lease to the full term.
3. Deduct depreciation during tax season
Similar to the benefit of business owners being able to deduct leasing costs from taxes, they can also write off the cost of equipment depreciation on taxes. According to the IRS, companies can subtract depreciation using the section 179 deduction, potentially saving thousands of dollars each year.
4. Expand choices of suppliers
Since companies have more impact as a property owner, they can also oversee all decisions for purchasing equipment, including choosing suppliers. When buying items, they do not have to limit selections to a leasers’ specific company stock. Operators can adjust purchases accordingly, especially in an emergency when they need to make decisions swiftly. For example, if an oven in a restaurant breaks and the restaurant owner can purchase a replacement right away without having to consult a leasing agreement.
5. Flexibility for financing options
Whether or not operators have the money upfront to purchase appliances or machinery, there are various financing choices. They can borrow the down payment combined with equipment financing, purchase and own the equipment. While business owners may be familiar with traditional financial institutions, there are alternative lenders, who specialize in working capital solutions which can be used for down payments. To help find the right loan products, consider applying for LoanMe’s working capital loans. This option provides flexibility when acquiring funds and lets businesses decide how they want to spend money for any company purchase.
Apply for a working capital loan with LoanMe no matter the business size or type to receive a decision and cash fast.
*This article has been prepared for general information purposes only. The information presented is not legal, financial, tax or accounting advice, is not to be acted on as such, and is subject to change without notice. Credit approval is subject to LoanMe’s credit standards, and actual terms (including actual loan amount) may vary by applicant. LoanMe requires certain supporting documentation with each new application. If you have any questions regarding this, call us at 844-311–2274. California loans are made pursuant to LoanMe’s California Department of Business Oversight Finance Lenders Law License #603K061. LoanMe also offers loans in certain other states which may have higher minimum loan amounts. Copyright © 2015 LoanMe, Inc. All rights reserved.