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Under
current financial conditions, where traditional capital
funding is scarce, many business owners have a viable
financing option right under their nose.
Equipment
financing is gaining popularity as cash-strapped
companies seek to leverage assets and maintain market
share. In many cases, that ability to use equipment
financing can provide benefits in several areas at once.
For
instance, the new tax acts of 2002 provide for bonus
depreciation of qualified equipment assets placed in
service. The bonus of 30% is added to the depreciation
schedule of the equipment in question. For example, a
qualifying equipment purchase of $100,000 that is under
a MACRS schedule of five years can garner a $44,000
depreciation in the first year!
It
is also advantageous for small and medium sized
businesses to take advantage of the Internal Revenue
Service Tax Code 179. The code allows a corporation or
partnership to fully expense tangible property in the
year it is purchased up to $24,000.
Freeing
the money invested in that equipment through a financing
program can yield significant capital to be used in
other operations. Companies can achieve their equipment
acquisition goals through various programs such as:
capital and operating leases, equipment finance
agreements, and sale lease back transactions.
A
company can also finance their computer software
purchase, up to 100% of the cost of the software,
including a full year of maintenance.
Using
creativity, specialized knowledge, extensive resources
and industry experience, a qualified equipment financing
source should be able to help businesses find additional
capital resources within the entity itself.
The
guest author, Larry Wagner, is Vice President of one of
CMI Capital's banking partners, and a specialist in equipment
finance. |
