On a daily basis, we get asked why equipment finance is a good idea when I can buy it outright. Why would I get myself in debt? What are the benefits? – So we thought it would be a great to give you some reasons why.
By financing your equipment purchases your business is able to make the most of the following benefits:-
- Keep cash in the business which could then be spent on marketing and growth strategies as well as general office expenses.
- Paying cash erodes business cash flow which then has an impact on the businesses ability to pay directors fees, superannuation and taxes.
- Increase productivity and efficiency, the equipment may allow you to complete jobs in less time, effectively increasing margins and freeing up your time to take on more clients;
- Loan Interest is tax deductible as is depreciation on the cost of the goods effectively making the whole purchase tax deductible.
A couple of years ago, we were approached by a client who had been in business for a couple of years. They needed to buy $25,000 worth of plant and equipment which would enable them to increase business efficiency. With background history on the client we managed to get the equipment finance they needed. The equipment enhanced the business, allowed them to concentrate on getting more sales, increasing their bottom line.
This was a couple of years ago and every 3 – 6 months, the client comes back for another machine as their business has grown as a result of the first equipment. Now this client is heading towards a $1m turnover all because they decided to think a little differently and finance equipment to help grown their business.
Another great story was helping a market stall holder purchase a used car as her existing car had just given up. She knew what she could afford. She had done her sums and worked out what it cost her every day in cabs and public transport. With a quick discussion we figured out the best way to approach financing and get the client her new car.
Of course this doesn’t mean that everyone financing is going to have the same outcome as every circumstance is different, but if gives a general idea of what can be achieved.
What I love about these scenarios is that I can help find solutions for small business owners to grow their business. Laurentide’s makes financing easy and enjoyable. Just give us a call if you would like to discuss options which could be available to you.