“I don’t buy something if I can’t afford to pay for it. While this old adage appears wise on paper, being able to afford something doesn’t necessarily mean you need cash to pay for it.
Unfortunately, many people strictly adhere to this principle and miss out on opportunities to acquire the heavy equipment and trucks they need. Most Ritchie Bros. Financial Services customers use financing as a strategic tool to shape the future of their business growth. Here are five reasons our customers prefer financing over cash when purchasing new equipment.
1. Be smart
Financing or leasing saves the cash you need to run your business. As any business owner knows, it’s difficult to budget for equipment expenditures among your other fixed (payroll, office space, etc.) or unexpected expenses (repairs, surprises during a contract, etc.). Remember: “Cash is king!”
2. Be nimble
Businesses using heavy machinery and transportation equipment are typically capital intensive. As a result, cash flow is the life of the business, especially during uncertain times. Keeping more cash on hand allows you to keep working when your receivables are behind and to jump on additional jobs while others sit on the sidelines.
3. Be best in class
Financing helps you buy the equipment best suited for the job and not for your budget. Rather than individually buying new equipment in full, which can be expensive and inefficient, leasing allows you to use up-to-date technology and equipment without paying all at once and risking the health of your cash flow.
4. Be established
Whether your business is new or established, financing can help you build a comparable credit history. When you seek to borrow, lenders review the amounts you’ve previously borrowed to assess your ability to manage that level of debt. If you have a solid credit history, you’ll gain easier and faster access to funds when needed. For businesses that depend on heavy machinery or transportation equipment, quick access to substantial capital can make the difference between seizing an opportunity and missing out.
5. Be tax savvy
If your business is having a banner year and you want to minimize your tax liability, certain leasing contracts can help create additional expenses to write off against your income. Consult with your accounting professional to ensure you’re taking advantage of this great opportunity to save money! Whether you’re a small, new or established business, reconsider using cash for equipment and truck purchases. Obtain the equipment and trucks you need while preserving your capital with flexible financing and leasing from Ritchie Bros. Financial Services today!