When is it the Right Time to Finance Equipment?

Having the necessary equipment is vital when keeping your business operating smoothly. Whether you are replacing, upgrading, or purchasing equipment, it can put a severe dent in your cash flow. However, with the right equipment financing, cash flow can stay perfectly aligned to your company’s daily needs.
When it comes to the timing of when to seek financing, it's important each business owner make that choice with help from a knowledgeable equipment finance partner. Here are some common scenarios when equipment financing may be beneficial.
When old equipment is costing you time.
It's no surprise that when equipment breaks down, it costs business owners time AND money. For every moment your equipment is not functioning properly, dollars are slipping away. The occasional breakdown of equipment is something to be expected; however, consistent breakdowns force you to reevaluate if you are throwing bad money after good.
You can calculate equipment downtime by dividing the total number of units produced by the actual operating time and get the average production rate for your equipment. 
25 widgets per hour at a profit of $150.00 dollars per widget (or service) = $3,750 per hour
Then, multiply the total downtime by your average production rate.
Machine is down 10 hours a month multiplied by lost profit of $3,750/hour = $37,500 Monthly loss. 
When your equipment is outdated.
Newer technology can significantly increase profits. For instance, business owners in the photography and film industry need to have the latest and greatest gear at all times. In the tech industry, software also updates frequently, and it's essential to have updated technology to provide proper customer care and service. If you ignore changing technology, you can be left behind.
When old equipment is endangering your team.
In the construction arena, as well as many other industries, we tend to rely on heavy machinery to get the job done. When that heavy machinery breaks down, and can potentially cause injury or risk lives, it's time to get new equipment. Trying to save on cost when it comes to your equipment in these scenarios is not the way to go. Be wise and be safe.
You are expanding your operations.
If you're looking to expand your operations, you will often need to purchase new office equipment, machinery, or software and technology. Especially within an expansion you want to keep your working capital free for a number of expenses that may come up. Don’t tie it up by purchasing machinery or equipment that can be financed and be written off 100%.
You need to build business credit.
For many business owners purchasing equipment outright is not an option. The type of equipment leasing Alliance offers is an excellent alternative to a traditional business loan. It is the only form of financing that allows you to build business credit while keeping it separate from your personal Bureau. It also qualifies you for a substantial cash deduction at tax time with the Section 179 Tax Code.
The moral of the story.
Knowing when it’s the right time to consider equipment financing can be tricky. We suggest finding the time to speak with one of our friendly staff members to understand what your options are and how we can help you get there. There's no harm in asking questions about a process that can affect the livelihood of your business. 
Click here, and you can begin filling out your application today. You can also find us available at 1-800-449-0674.