Heavy equipment financing is financing a heavy piece of equipment is a much more sensible route if you want to get the equipment you need without spending a significant amount of working capital of your business.
Heavy equipment financing by means of a traditional or non-traditional loan can still be a more sensible route than a lease.
Here are just a few reasons why:
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.
Low Obsolescence Heavy/construction equipment is not as threatened by obsolescence as equipment in industries such as technology or medical. With proper maintenance, heavy/construction equipment can more than outlast the cost-benefits of a lease.
First – Year Expensing Purchasing may allow you to deduct up to $24,000 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.