Posted by Nikki Wardle on Nov 22, 2016 9:00:00 AM

take advantage of tax savings

Whether you are in construction, agriculture, or transportation equipment costs keep going up with no end in sight. In the post-Great Recession economy growth is slow going and it can be hard to expand your business to cover the bills when you are facing substantial costs in equipment renewals due to upgrade or replacement needs. The good news is that there is an option available that can help get you into that new piece of equipment and give you some nice tax benefits in the process.

Leasing used to be a nearly unsustainable financial choice when dealing with commercial equipment. However, the recession rewrote some of the most conventional rules regarding financing and the benefits of the various options. Commercial equipment leasing has several very attractive options for small businesses from zero down options, upgrade options, and tax savings.

100% Financing

This can be a huge benefit to your business as it saves you cash flow and unfortunately many businesses in these sectors are still healing from the recession and may not have the lump sum to put down on a new equipment purchase. With commercial leasing often you can minimize, or eliminate, your down payment and save that cash flow for your everyday expenses and payroll. For some businesses, this is precisely the help they need to take that next step in their growth plan.

Upgrade Past Obsolescence

Now it seems like everything, electronic or mechanical, has an expiration date. The industry terms are 'planned obsolescence,' and the real world name is money-grabbing. To be fair to our technological overlords, at the rate computer speed is increasing you may not be in the best position if you keep a piece of equipment very long. If you buy it, though, what are you going to do with it when it becomes obsolete? With the drop in used equipment prices, you will likely be stuck with an inefficient machine that is costing you money.

A commercial lease gives you the opportunity to use the equipment for your fixed monthly payment and upgrade, or buy, at the end of a fixed term. This can give your business enormous flexibility regarding growth and always run at the most efficient point possible, and that will save you money over the long term and help grow your bottom line.

Tax Benefits

Many small business owners are aware of the tax benefits of an equipment purchase in using depreciation, and others. However, the Section 179 tax deduction in place currently allows you to deduct up to $139,000 worth of qualifying leased equipment. That is something you should consider and speak with your accountant about so you can make the best decision for your business in the long run.

Commercial leasing isn't as poor of an option as it may have once been. Instead, it might be a no-brainer for many business owners. Be sure to examine all of your options and speak with a leasing agent that has the financial skills and experience in construction, agriculture, or transportation to make sure your interests are protected.

Guide to the benefits of leasing

Nikki Wardle

Written by Nikki Wardle

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