Why should you use asset-based financing? This is a question we get quite often. Prospective buyers of commercial equipment wonder what advantages there are to asset-based financing, if any.
First and foremost is the advantage of not having to outlay a lot of cash upfront to have use of the equipment you need. It’s not as important to OWN the equipment, as it is to have USE of it.
The income that a company can generate from use of the financed equipment in a month should exceed the monthly payment for the equipment. The cash outlay that would have been used to purchase the equipment outright is instead preserved for other business expenses, or maintained for an unexpected emergency.
Of course, there is the fact that financing comes with a fixed rate over the term of the financing. No surprises. And once the loan is approved, no additional financial reporting is necessary. No annual requirements, no personal financial statements, no balance requirements in the business checking account.
Under certain circumstances, there are tax advantages to asset-based financing rather than paying for the equipment outright. Check with your accountant for the depreciation deductions that you may qualify for.
Consider how financing new, more efficient equipment can help you moving forward. Don’t wait until the old equipment wears out. Look to see how updated equipment can give you a competitive edge TODAY. It may well be worth the investment now.
We are Acceptance Leasing and Financing Service, Inc. We are located near Pittsburgh, Pennsylvania and have been helping commercial clients for over 30 years. We are a team of professionals, dedicated to working closely with you to obtain an approval with the best rate and terms for you. We hope you’ll call us today at 412 262-3225.