# Let the Capital Do the Heavy Lifting-Magazine
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-06-02
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Benefits of Equipment Finance and Leasing for Businesses
Meta Description: Learn how equipment finance & leasing can help businesses manage budgets, expenses, and hedge against lean growth years. Get the latest insights here!
URL: https://financedigest.com/magazine-let-the-capital-do-the-heavy-liftinghtml

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An Insider’s Perspective of Equipment Finance and Leasing **Work**

_By_ **_Conrad Magalis_** _– Marketing Manager – Advance Acceptance, First Western Bank & Trust_

![Conrad Magalis](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/conrad-magalis-photo-208x300-1736843785303-compressed.jpg)

Conrad Magalis

Equipment finance and leasing can offer a variety of benefits for both small, family-owned companies and large multinational corporations, alike. At Advance Acceptance equipment finance (a Division of First Western Bank & Trust), we work with businesses of all sizes to help them achieve their goals.

There are a variety of reasons why a business may choose to finance or lease, over paying cash. One of the most appealing [benefits for accountants and business](https://www.financedigest.com/top-benefits-of-invoice-discounting-for-small-businesses.html "Top Benefits of Invoice Discounting for Small Businesses") owners is the ability to maintain working capital. By financing equipment, a business is better able to manage their budget and expenses. A hurdle for smaller businesses and contractors has always been the conservation of working capital between projects and seasonal shifts.

By leasing or financing, a business can spread out the upfront cost of the equipment over monthly, [quarterly or seasonal schedules — allowing additional funds to be used to hire sales](https://www.financedigest.com/uk-new-car-sales-up-by-nearly-a-quarter-in-october-smmt.html "UK new car sales up by nearly a quarter in October – SMMT") staff, market more aggressively or apply it to additional advertising spend. Just because a team has “the latest and greatest,” doesn’t mean that additional capital can be brought in without sales, marketing or advertising.

Another example of why conserving working capital can be beneficial is to hedge against a lean [growth year](https://www.financedigest.com/the-liquid-chromatographymass-spectroscopy-market-is-estimated-to-witness-stupendous-growth-in-the-years-to-come.html "The Liquid Chromatographymass Spectroscopy Market is estimated to witness stupendous growth in the years to come"). Many business owners and operators can attest to the fact that it’s better to have reserve working capital to help offset a loss of a large account or contract, the loss of a key [staff member](https://www.financedigest.com/gumgum-appoints-new-staff-members-across-germany.html "GumGum appoints new staff members across Germany") or an overall slow-growth year. It’s better to be able to [keep the lights](https://www.financedigest.com/take-five-keeping-the-lights-on.html "Take Five: Keeping the lights on") on, than have a new piece of equipment paid for in earnest.

[Risk management](https://www.financedigest.com/crypto-investors-step-up-risk-management-after-last-years-meltdowns.html "Crypto investors step up risk management after last year’s meltdowns") is another benefit of equipment finance and leasing. Breaking up the cost of a substantial capital [asset investment](https://www.financedigest.com/the-rise-of-fractional-investing-accessing-high-value-assets-with-small-budgets.html "The rise of fractional investing: accessing high-value assets with small budgets"), into payments, allows a business to achieve business objectives – the benefit of time is always an appealing business strategy. Achieve the desired [return with the new capital](https://www.financedigest.com/insurer-aviva-says-capital-return-and-costs-targets-on-track.html "Insurer Aviva says capital return and costs targets on track") equipment purchase and allow more time to think about the business as a living system.

Old and outdated equipment may be costing more than initially suspected in several situations. A pitfall many operations managers run into is keeping old and outdated [equipment in service](https://www.financedigest.com/research-report-on-food-service-equipment-market-for-exploring-various-growth-dimensions.html "Research Report on Food Service Equipment Market for Exploring Various Growth Dimensions"). Continuing to pay to update and repair outdated equipment can end up affecting the [bottom line](https://www.financedigest.com/how-high-performers-can-increase-a-bottom-line.html "How high performers can increase a bottom line"), because there is a consistent stream of funds expended into a fully depreciated asset.

Pairing the right equipment with a proficient staff can make all the difference in completing a variety of tasks: repairing a car at a dealership; planting seeds in an agriculture field; or mapping out a piece of land, using the [latest survey gear](https://www.financedigest.com/the-global-demand-of-motocross-gears-market-growth-analysis-latest-trends-and-forecast-till-2031.html "The Global Demand of Motocross Gears Market, Growth Analysis, Latest Trends and Forecast till 2031"). No matter the business, everyone needs equipment to function, keep a [competitive edge](https://www.financedigest.com/leveraging-ai-for-the-competitive-edge-in-insurance.html "Leveraging AI for the Competitive Edge in Insurance  ") and remain profitable.

Old and outdated equipment can also detract from human capital as well. By running an outdated piece of machinery, it can be physically and mentally detrimental to employees – ultimately [reducing operational](https://www.financedigest.com/just-in-time-jit-and-lean-accounting-streamlining-operations-and-reducing-waste.html "Just-in-time (JIT) and lean accounting: streamlining operations and reducing waste") efficiencies and causing havoc such as a high employee turnover rate.

Winning a contract without the right tools in the toolbox can be the demise of a service-based business. Old and outdated equipment can upset customers and ultimately lose businesses substantial capital gains, because the job isn’t completed satisfactorily, on time, or at all. Don’t get caught up with the wrong [equipment that will diminish future](https://www.financedigest.com/material-handling-equipment-market-2022-scope-of-current-and-future-industry-2030.html "Material Handling Equipment Market 2022 | Scope of Current and Future Industry 2030") objectives.

Advance [Acceptance partners with a variety of equipment manufacturers to offer](https://www.financedigest.com/germanys-slm-recommends-shareholders-accept-nikon-takeover-offer.html "Germany’s SLM recommends shareholders accept Nikon takeover offer") in-house finance solutions for their customers. Many [businesses can take advantage of financing their equipment at zero percent interest from programs specifically created to help the manufacturer sell](https://www.financedigest.com/unitedhealth-to-sell-change-healthcares-claims-business-for-2-2-billion.html "UnitedHealth to sell Change Healthcare’s claims business for .2 billion") more inventory. Next to nothing can beat the ability to maintain working capital, manage risk and spread the cost over a longer period of time – all while paying no interest on the equipment.

A word of advice — make sure to [ask the dealer or sales](https://www.financedigest.com/hermes-asks-court-to-block-metabirkin-nft-sales-after-jury-win.html "Hermes asks court to block ‘MetaBirkin’ NFT sales after jury win") representative if the manufacturer has a no interest finance program available, before making any capital purchase. In an extreme scenario, it may take a few additional hours of research to track down that once-in-a-lifetime deal of no interest. Oftentimes, taking a couple of hours or another day to shop around can pay major dividends for a business over the long-haul. Don’t be afraid to say no to the first deal, take a step [back from the pressure](https://www.financedigest.com/two-thirds-of-iaea-board-backs-western-statement-pressuring-iran.html "Two-thirds of IAEA board backs Western statement pressuring Iran") and play the cards in your favor.

Another insider tip to the savvy [business manager](https://www.financedigest.com/intelligent-receivables-management-why-its-a-businesss-greatest-ally.html "Intelligent Receivables Management: Why it’s a business’s greatest ally") is to wait until a major industry trade-show or seasonal event arises. [Equipment manufacturers will offer no interest finance programs around](https://www.financedigest.com/the-medical-ultrasound-equipment-market-to-stick-around-based-on-organic-expansion.html "The Medical Ultrasound Equipment Market to stick around based on organic expansion") this time or exclusively at the event. Don’t be afraid to [call up someone that operates in the same industry](https://www.financedigest.com/struggling-british-pig-industry-calls-for-tesco-to-step-up.html "Struggling British pig industry calls for Tesco to step-up"), to see if they have any inside scoops on promotional zero interest equipment finance programs. The equipment dealer may be another untapped resource, that many may overlook or misjudge as too “salesy” or high-pressure.

In conclusion, there are many reasons why a business can benefit from equipment financing and leasing: conserving working capital; managing risk; and having equipment that [improves productivity](https://www.financedigest.com/demand-for-meatless-products-and-vegetable-proteins-is-expected-to-improve-nutritional-yeast-market-sale.html "Demand For Meatless Products And Vegetable Proteins Is Expected To Improve Nutritional Yeast Market Sale") and wins the service contract. The savvy entrepreneur, accountant or operations manager should always keep these benefits top-of-mind, when considering a capital equipment investment of any [size or cost](https://www.financedigest.com/food-thermos-market-2021-industry-size-growth-trends-segments-and-cost-structure-analysis-research-report-2029.html "Food Thermos Market 2021 Industry Size, Growth, Trends, Segments, And Cost Structure Analysis Research Report 2029"). The most [important insider’s tip is to always](https://www.financedigest.com/having-a-will-is-always-important-but-why-is-it-so-much-more-important-when-a-child-is-vulnerable-or-has-a-disability.html "Having a Will is always Important but Why is it so Much More Important When a Child is Vulnerable or has a Disability? ") shop around and ask if there is a no interest financing option available from the manufacturer – nothing beats zero interest and extra time to let the equipment begin paying for itself, before you pay it off. Time is everyone’s friend, until there isn’t time left to spend growing the business. Always remember to let the capital do the heavy lifting.

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“Original publication in Finance Digest Issue 1 https://www.financedigest.com/finance-digest-print-magazine/”
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