Getting the funds you need to purchase equipment upfront can put a substantial strain on your cash flow, especially if you're looking at some costly purchases such as IT equipment or medical facilities. So what is a small business operator to do?
When it comes to equipment finance - there are a few options available that can make capital acquisition less of a burden.
1. Equipment leasing - leasing is a great form of asset finance for businesses looking to update technology or acquire new equipment for their operations. When you lease equipment, the lending institution owns the equipment and your business pays for it use over a fixed term.
2. Hire/Purchase arrangements - many lending institutions will offer a hire/purchase arrangement for capital equipment, where the lender rents the equipment to your business and at the end of the agreed term, you can make a final payment to "purchase" the equipment - whereby the title will be transferred into your name.
3. Equipment rental - if you only need equipment for a one-off project - you may be able to rent your equipment for the short term instead.
Meanwhile, depending on the nature of your operations, your accountant may advise particular types of equipment finance as they can sometimes be tax-deductible in your accounting.
What equipment can I finance?
Many businesses may be misled into thinking that financing is only available for IT equipment or office assets. You can finance almost any equipment you use for business. Among options available are:
- Medical equipment finance
- Leasing for printers
- Veterinary equipment finance
- Industrial machinery such as tractors, bulldozers and most heavy equipment.