Lately, the kind of capital business people seek has been changing. For the past 70 or so years, one of the most common ways new companies have raised capital is through venture capital. In arrangements with venture capitalists, a startup receives funding or expert advice in exchange for an ownership stake.
Recently, though, that’s started to change. Many startups and established companies are finding other ways to raise capital. One of the most popular ways they’re doing this is with debt raises. Instead of selling ownership in the company, they’re selling instruments like bonds to investors. These pay interest at a fixed rate and by a specified date.
Investors tend to like these debt instruments because they’re less risky. That’s especially true during a global crisis like COVID-19, where entire industries have taken a hit and it can be harder to get venture capital. Bonds offer a fixed rate of interest, which must be paid back. Even if a company went bankrupt, the people who purchased debt instruments would take priority over other creditors. Companies including AirBnb, Skillsoft, and Udacity have raised money this way in recent months.
For many smaller businesses, both of those options may be out of reach. The average entrepreneur is more likely to seek a loan from a bank, or the SBA, when they’re starting up or expanding. But even for small-scale business people, there are other ways to inject new resources into a company. One of the best is equipment financing.
Equipment financing is a time-honored way to breathe new life into a business. At Alliance Leasing, we’ve been doing this for over three decades. Equipment leasing is flexible, lets owners keep control and offers some very significant tax benefits for businesses. Under the terms of the Tax Cuts and Jobs Act of 2017, companies can write off up to $1 million in financed equipment, provided it’s placed into service during the year it was purchased. Used equipment is eligible, too: it doesn’t have to be new.
Almost any business equipment is eligible for this benefit. And at Alliance, we finance up to 100%. We help companies purchase everything from construction machinery to software. We’ve worked with almost every industry imaginable, including healthcare, transportation and beauty/personal care. Contact us today. We’d love to hear about your business plan, and help you achieve your goals.