Construction Equipment Financing Explained
If your company is looking for construction equipment financing, there are two main choices, loan or lease. Business owners need to weigh all options when it comes to obtaining financing for construction equipment. Both options have their merits and their drawbacks.
Construction Equipment Purchased Using a Business Loan to Buy
Heavy construction equipment does not become obsolete during the life of the equipment. Construction equipment is very durable. With proper equipment maintenence, heavy duty construction equipment will last for years past what a lease would offer.
Also once the business loan is paid off, the business owns the equipment. This is very valuable in the fact that your business gains collateral which builds accrued equity. This equity can be used later on down the road to help secure working capital if the need arises. However, we have found that unsecured lines of credit offered the small business person all the extra working capital they need, with requiring collateral. Furthermore, the equipment that is bought can be counted on taxes as depreciation.
The Benefits of a Leasing Construction Equipment
Tax benefits is the number one reason that business owners generally lease construction equipment. This is especially true in terms of what is called a "true lease", where you get a 100% deduction.
The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn't. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.
The fact that you can often get the equipment that you need without any down payment is one of the primary benefits to some. Businesses, like start-ups, that are not flush with cash love this aspect if they can find it. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.
Choose The Best Route For Your Construction Business
Whatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!
Construction Equipment Purchased Using a Business Loan to Buy
Heavy construction equipment does not become obsolete during the life of the equipment. Construction equipment is very durable. With proper equipment maintenence, heavy duty construction equipment will last for years past what a lease would offer.
Also once the business loan is paid off, the business owns the equipment. This is very valuable in the fact that your business gains collateral which builds accrued equity. This equity can be used later on down the road to help secure working capital if the need arises. However, we have found that unsecured lines of credit offered the small business person all the extra working capital they need, with requiring collateral. Furthermore, the equipment that is bought can be counted on taxes as depreciation.
The Benefits of a Leasing Construction Equipment
Tax benefits is the number one reason that business owners generally lease construction equipment. This is especially true in terms of what is called a "true lease", where you get a 100% deduction.
The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn't. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.
The fact that you can often get the equipment that you need without any down payment is one of the primary benefits to some. Businesses, like start-ups, that are not flush with cash love this aspect if they can find it. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.
Choose The Best Route For Your Construction Business
Whatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!
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Need money for your construction business? Wall Street Capital Financing offers financing Read more at Financing Construction Equipment.
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