As your screen printing business grows, you will inevitably be faced with the decision to take on financing or pay out of pocket with cash to help your business move forward. Your business can use financing to purchase a bigger operating space, fund a big project or purchase new equipment.
Before you make a decision on financing, you should know all of the ways your screen printing shop can benefit from equipment financing.
Grow your production
Most business owners know the primary benefit of equipment financing: It allows you to grow your production or your service offerings. Purchasing new screen printing equipment takes a lot of capital. Financing allows you to break the cost of equipment purchases into more manageable monthly payments. With financing, you don’t have to deplete your cash reserves to purchase new equipment and increase your production levels or offer a new service. Often, the increase in sales you see from adding equipment will outweigh monthly financing payments for that equipment.
Save on your taxes
When you finance an equipment purchase, you can see tax savings that can dramatically offset the cost of the equipment. Section 179 of the tax code allows businesses to deduct 100 percent of an equipment purchase on their taxes, even if they’ve purchased that equipment through financing. That deduction can save you thousands of dollars on your tax return, even if you’re only making a small monthly payment on your equipment.
An automatic press is a big investment that financing can make more manageable – and when it’s up and running,
it can quickly pay for itself. Check out our nifty ROI Calculator to find out how much you can save with an auto:
Manage your finances
Managing cash flow and maintaining cash reserves to last when business sees a natural, temporary dip can be one of the most challenging parts of owning your own business. Draining your cash reserves to make a large equipment purchase can be an intimidating notion. When you finance, rather than paying cash for equipment, you can moderate the financial impact of a big purchase on your business. You won’t have to drain your cash reserves, and you can factor the regular monthly payments into your business’s financial plan to ensure that you’ll have enough cash on hand to pay salaries, overhead and operating costs.
Build your credit
Having good credit is beneficial to a business, even if you plan to grow your business primarily using cash. At some point, your business might require a loan to purchase a new building, expand your existing location, buy a major piece of equipment or purchase the supplies needed to complete a large project. Having good credit will ensure that you can get the loans you need to grow your business. If you don’t have significant credit history, obtaining a loan for your business can be difficult. Financing a piece of equipment and adhering to the terms of your financing agreement can help bolster your credit history so your business can get a loan when it needs one.
Many business owners relish the thought of growing their business using only the cash they have on hand from profits. But this can slow the growth of your screen printing business. If you are faced with an equipment purchase, weigh the benefits of equipment financing. Financing your equipment can help you grow your business faster and more effectively, and it can result in cash savings on your taxes and a stronger credit history.
Interested in adding a new piece of equipment to your shop and want to talk about your financing options? Click here to find your Anatol factory representative!