Working capital financing is the lifeline of growing and established business. Many bosses of firms want to grow the working capital without using their bank lines. Every successful firm needs working capital in hand in sufficient amount. Financing, or borrowing, this money is sometimes an option to be dealt by working capital management team. The prime goal of the team is to ensure the smooth flow of its operations, and that it has sufficient cash flow to meet operational expenses.
According to “2012 U.S. Equipment Financing Outlook”, With the equipment financing industry forecasted to grow 9% through 2012 now may be time for companies to consider replacing outdated equipment. “We’re seeing a great deal of opportunities now, and hearing discussions around equipment managers’ and finance managers’ desires to invest in new technology”, Vince Belcastro , Managing Director and head of CIT Capital Equipment Finance for CIT Group Inc ., said in an interview.

Types of Equipment Financing
There are different sectors, which need equipment financing to grow and compete in the industry. Usually, fitness, medical, communications, office equipment, IT computer, office furniture, construction, heavy equipment, dental, software, beauty tanning and many others.

Lease or Loans

There are scores of opponents and proponents of Leasing and loan financing. In experts opinions, leasing is the best option for growing firms. That is why it has become one of the fastest expanding windows of acquiring equipment in business. According to surveys 80% of Americans investors lease some portion of their equipment. An immature business needs working capital in sufficient to maintain the smooth cash flow and to add equipment. Here, leasing can play the role of the savior to inject the equipment in the firm by securing it any major investment. A prudent investor often clicks on leasing due to the following reasons:
Low monthly payments

In lease financing, low monthly payment with flexible installments and deadlines is a the best option vis-?-vis loan financing.
Secure Cash in Hand

Leasing ensures business to keep cash in hand for future needs, hidden expenses. It provides working capital when firms facing credit crunch.
Free from down payments
Traditionally, in loan financing lenders demand up to 25% down payments. Whereas, in lease financing, investor feels free from down payments because leasing company pays 100% of the cost of the equipment. In most cases, the leasing company subjects only one or two payments in advance with deal.
Preserve Existing Lines of Credit
Leasing ease the investors by securing credit lines. It provides new investment opportunities to grow the firm.
Eliminate obsolescence

Leasing protects the investors from the risk of obsolescence. Technology is no longer a constant asset in today’s world. That is why the investors always anxious about the durability and long term utility of equipment. Leasing provides a perfect solution for contingency management team by eliminating the obsolescence on equipment financing. Leasing made possible you not only to equip the firm today’s best technology but also gives free hand to upgrade the equipment.
Fixed payments

Credit companies and banks usually have variable interest rates for the investor interested in equipment financing. Whereas, leasing companies offer fixed payments in easy installments. Leas financing protects the investors to be a victim of multiplying interest rates.

Tax and Accounting Advantages

Leasing leads the investor towards tax and accounting advantages. It eliminates the issue of depreciation schedules. Paying cash regularly for equipment adds to the cost, and taxes deduce on profits automatically.

Equipment Financing, Equipment finance


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