5 Ways to Tell When It’s Time for an Equipment Loan
If equipment plays an essential role in your business, then you have to consider it one of your most important assets. As such, the time will come when you need to replace it. Making the determination on when to replace it is tough but only second to deciding on how to fund the purchase. One option is equipment financing where you get special funding specifically designed for equipment purchases. Here are five ways to tell if you are ready to replace your equipment with an equipment loan.
- You Don’t Want Loan Liability
One of the best things about equipment financing is it works differently than a conventional loan. You can get the financing you need with flexible terms and often without any money upfront.
- You Cannot Afford To Tie Up Your Working Capital
If you do not have the extra money to invest in equipment right now, this type of loan is handy. You can save your cash for other needs to keep your business running smoothly while also replacing important equipment.
- Your Budget Is Tight
If you are having budget issues and worry you cannot afford to buy equipment right now, then consider the perks of this loan. You may qualify for Section 179, which allows you to write off some or all of the purchase costs to lower your tax liability. In addition, you can spread out the costs of the equipment over time without having to pay a huge lump sum all at once.
- Your Equipment Is Outdated
In some cases, even if the equipment still runs fine, it may be time to replace it if it is outdated. For some industries, outdated equipment can mean lost sales. If you see your equipment is holding your business back and preventing you from serving your customers fully, then it is time to replace it.
- You Can’t Keep Equipment Functioning
Another great sign it is time for a change is when you spend more time doing equipment repairs than actually serving your customers. If you have to keep repairing something, the downtimealone is probably eating into your profits and costing you as much as replacing the equipment would.
When it comes to the equipment you use in your business, sometimes you have no choice but to replace it. If this happens when money istight, don’t worry. You can always remedy the situation while also managing your budget by using equipment financing.