Many business owners seek to minimize debts and liabilities. However, sometimes, financing can be a good thing for a company’s bottom line. The following are four reasons why companies should always consider financing their equipment.
1. Makes High-Cost Equipment Affordable
The equipment you need for the most efficient operations possible can be costly. Purchasing all of this equipment outright can be a significant financial outlay all at once. Many newer companies do not want to spend that much capital all at once – or they might not even have the necessary capital to do so. The good news is that financing equipment is a possibility that can allow you to get the equipment you need without risking all of your capital. Financing eliminates upfront cost by fixing your payments over a short term contract.
2. Saving Cash
Companies should always have cash or other liquid capital on hand. Cash can be limited, the last thing you want to do is spend a substantial amount on equipment. Financing your equipment can keep cash available for the following important aspects of your business and more:
- Research and development (R&D)
- Marketing and Advertising
- Hiring Key Employees
Equipment financing allows you to keep up with current operations while also focusing on growth and scaling up at the same time.
3. Staying Up to Date
When you purchase equipment outright, you want to get the most of your investment and use the equipment for as long as possible. The problem is that technological advancements mean that hardware, software, and other types of equipment can quickly become outdated. You want to have the most efficient and effective operations possible to keep up with competitors and best serve your clients, so you want your equipment to be state-of-the-art.
When you finance equipment, you can regularly upgrade and acquire better equipment without losing out on your investment. Instead of having to sell your existing equipment, which depreciates quickly, and purchase all new equipment, you can simply adjust your contract to reflect the upgraded hardware and software.
4. Accelerate ROI
Financing allows you to make smaller payments for your equipment while it generates revenue for the company. This results in a much higher return on investment (ROI) than it would if you paid for the equipment in one lump sum. When you purchase equipment outright, it can take time for the equipment to generate enough to cover the purchase. However, with small payments, you can see returns almost immediately.
Contact Blue Street Capital for More Information
Blue Street Capital helps companies find solutions to obtain necessary equipment while increasing your bottom line. The right financing can allow your business to generate more revenue, stay as competitive as possible, better serve your clients, and keep growing all at the same time. We work with all types of businesses, and our goal is to help your company succeed. If you would like to discuss your options for equipment financing, please contact us today.