Commercial property Construction Equipment Financing Options

Commercial property Construction Equipment Financing Options

Construction equipment financing has two primary options, loan or lease. As the owner of a business that typically uses construction equipment, the business owner has to bear in mind both options, both of which have benefits and drawbacks.Construction Equipment Purchased Using a Business Loan to BuyEquipment used in the construction industry in most cases will not become obsolete during the life of the technology. For years, bulldozers, backhoes, and other construction equipment have endured. You don't see a lot of changes in heavy equipment because they are a time-tested technology. When maintained properly, it will last for years for the construction company owner.Also once the business loan is paid off, the business owns the equipment. This is very valuable in the fact that your business gains collateral which builds accrued equity. This equity can be used later on down the road to help secure working capital if the need arises. However, we have found that unsecured lines of credit offered the small business person all the extra working capital they need, with requiring collateral. Furthermore, the equipment that is bought can be counted on taxes as depreciation.The Benefits of a Leasing Construction EquipmentTax benefits is the number one reason that business owners generally lease construction equipment. This is especially true in terms of what is called a "true lease", where you get a 100% deduction. The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn't. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.Most business owners like the notion of using a lease because you can get the equipment without a down payment or very little at all. So this eliminates the upfront costs involved in buying your own equipment outright. This makes it much easier on businesses that are startups especially. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.Make Plans to Succeed in Your Construction BusinessWhatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!

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