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Equipment loan financing there is traditional and non-traditional

Equipment loan financing through traditional or non-tradition methods rather than leasing can, in some cases, be a more sensible route. Here’s why:

Low Obsolescence
Obsolescence is when something becomes obsolete due to a shift in technology or a change of needs in an industry. Certain equipment is not as threatened by obsolescence as equipment in industries such as technology or medical. You would need to determine if, through proper maintenance, your equipment would outlast the cost benefits.

Equity/Ownership
Whether it’s a conventional term-loan, a line of credit (secured or unsecured) or an asset-based loan, the key factor is ownership. You enjoy the benefits of ownership and the future flexibility to utilize accrued equity to leverage working capital when needed.

First – Year Expensing
Purchasing may allow you to deduct up to $25,000 worth of equipment in the year it is purchased (as part of first-year expensing); anything above that amount gets depreciated over several years. With the first-year expense deduction, the "real cost" of the equipment is greatly reduced.


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