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Equipment Financing vs. Cash
Cash Flow:
Cash flow is defined as: the total amount of money being transferred into and out of a business, especially affecting liquidity. Projecting cash flow can be helpful to you when deciding whether to buy business equipment for cash or to finance it.
Disadvantages of Borrowing Money from the Bank:
- Mountains of paperwork
- 85% chance of being declined
- The process can take several weeks
- You may tie up your credit lines
- Sales tax may be due upfront
- Down payments will usually be much higher
Advantages of Financing Equipment :
- Easier to qualify than a Bank Loan
- Less paperwork
- Fast funding
- Low to no down payments
- You own the equipment
- Immediate Tax Deductions (179 Tax Law)
Paying Cash:
You don’t pay your employees for 5 years of work in advance, why pay for capital equipment in advance? Let the equipment make you money as you are paying for it.
ROI:
The use of the equipment is going to make you more money than the cost of the lease. This allows you to be in the black from day one instead of paying cash and having to wait to be Cash Flow Positive.
Cash is King:
Keep your cash on hand for business occurrences which are harder to finance, such as advertising, hiring bonuses, upgrades to the building, etc.
Leasing is a great way to build strong credit for your business.
Belco Packaging Systems, Inc.
www.BelcoPackaging.com
626.357.9566
