Equipment financing helps various industries and businesses of all sizes acquire the equipment needed to conduct everyday operations. Typically, a company will enter into a loan or a lease agreement in order to purchase or rent equipment for business use.

You can finance nearly anything essential for your business, including used or new equipment. Examples include racking, conveyor systems, telephones, forklifts, networking equipment, general IT, tools and transportation vehicles. You might also be able to bundle shipping, installation, tax, maintenance and other costs associated with your asset (typically referred to as “soft costs”). This is often referred to as 100% financing

Rates always vary based on how long you want to borrow the funds over, also the transaction size, creditworthiness, the asset you are looking finance, market conditions and other factors.

All businesses wishing to acquire capital equipment should try and look for the most tax efficient way to purchase the equipment. Lease payments can often attract tax relief. It is always good to speak with your accountant and they will be able to confirm the best way of doing this.

Its maybe that you can afford to buy the equipment upfront, but it is important to consider the following before you do. Leasing payments are essentially rental payments and therefore are an allowable business expense, so if your business is making money the profits are reduced by the rental payments you pay each year, which in turn reduces your tax bill. Payments are normally consistent throughout the lease contract, which means that increases in interest rates should not affect you and your cash budget can be used more effectively. Leasing enables you to protect your cash to use for other needs such as staff training, advertising, new stock, new business opportunities and of course unexpected expenses.