If you’re a business owner looking to acquire equipment and working capital, you’ve stumbled upon the right article! Most individuals and companies are stuck into choosing between financing and paying cash. Both have their own benefits and drawbacks but here is why equipment and services financing give more advantage to you!
Avoid Taking Unwanted Risks
Paying cash and owning something is equivalent to taking a big and pretty much unnecessary risk. Picture this in your head. You’ve decided to invest in IT equipment by paying cash with a confident amount of 60,000 dollars. A month later, you figured out that there’s a much cheaper option with 50,000 dollars plus higher quality equipment and you’re now filled with regret. This is a very dark situation for investors as losing money. It is the last thing we want to happen. This whole scenario can be avoided by financing your equipment and services. If the product happens to not fulfill your desired purpose, you can always stop using it and not lose a lot of money up front. A lot of lenders will allow you to amend your financing agreement within a certain time frame if the equipment is the wrong fit for your business.
Easier Budget Management
Financial management will definitely be easier for you as the equipment will be paid monthly with a smaller cost. Paying cash will use up a lot of your budget and won’t leave room for potential emergency spending and other priorities. Services financing, on the other hand, helps you invest in what you want without causing your bank account to dry up. Avoid the need to scramble for cash after you have used your precious capital to pay for equipment outright. Most businesses should always preserve their cash for intangibles, and finance the hard assets and even some services.
No Burden of Maintenance and Upgrades
If you pay cash and have full ownership of an equipment, you have to deal with maintaining them. Almost everything in the world needs maintenance from functionality to cleanliness and if somehow your equipment starts to dysfunction, you have to fix them yourselves. In the future, the chances of your equipment growing out-to-date are very highly likely and you don’t want to be forced into spending more for the latest and updated ones. Financing an equipment relieves you from all that unwanted hassle and leaves the third party to settle the upgrades.
Value and Quality of Equipment
Equipment diminishes in value over a period of time. For example, you will be paying a full 50, 000 dollars for an equipment but the value of it will drop after some duration. After a couple of years, the 50,000-dollar equipment will lose its original quality and will be valued a lot lesser such as 20,000 dollars. Paying monthly will avoid this situation and you can always maintain a high-quality equipment without having to lose money. A lot of people have recommended financing equipment and services from their experience. You can start up any desired business with the equipment you need while still having your budget assured. Having a third party dealing with the maintaining and upgrades leave you to focus on your priorities and important business matters. Paying cash might be a suitable solution for rare occasions so do analyze the advantages and disadvantages before deciding on an option. But, if you want to have a smooth and non-risky business, financing is the way to go!
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