Every entrepreneur understands capital goods. Capital goods are the things used by businesses to make the items and services they sell. Helping people access capital goods is essential when driving the economy. Equipment financing is one of the most business-friendly ways of borrowing to invest in more capital goods.
This type of financing is crucial during down times. Whether the issue is bad credit, tax liens or a lack of collateral, equipment financing can be a great solution for businesses that can’t access traditional loans. Alliance’s ability to work with several underwriters means we are able to offer the best term and lowest rates.
With better equipment, entrepreneurs are able to keep up with the constantly changing landscape of the business world. This will allow expansion and refinement of the goods and services they deliver. Software that helps streamline processes can also be financed. Any type of equipment pertinent to the business can be financed -- from trucks and trailers to computers and software programs. There’s a voluminous list of equipment we finance daily. Vendors, the companies that sell equipment, are favorable to this type of financing. They know they will be paid in full immediately.
For the borrower, equipment financing is a very practical manner in which to purchase much-needed business equipment. The business is able to use the goods to earn money while making small monthly payments. With this form of financing, the equipment is fully paid for at or before the end of its useful life. This means businesses are maximizing their efficiencies. Financing agreements generally have very favorable terms of up to five years.  Traditional bank loans often have shorter terms. This means less time to generate profit to pay back the loan.
Best of all, section 179 of the IRS tax code specifically favors this kind of financing. Under section 179 of the IRS tax code, businesses can deduct up to $1 million in property as an expense. The only requirement is that the property has to be used, or “placed in service,” by the business within the year it was purchased. This is much more favorable than some other forms of borrowing. Buying equipment with traditional loans typically means that only the interest can be deducted. For many small businesses, equipment financing is the best possible choice.