If your company is looking for construction equipment financing, there are two main choices, loan or lease. Business owners need to weigh all options when it comes to obtaining financing for construction equipment. Both options have their merits and their drawbacks.
Construction Equipment Bought Utilizing a Business Loan
Heavy construction equipment does not become obsolete during the life of the equipment. Construction equipment is very durable. With proper equipment maintenence, heavy duty construction equipment will last for years past what a lease would offer.
Also once the business loan is paid off, the business owns the equipment. The business gains collateral as it builds accrued equity. This can be very valuable for future financing on the business credit. Equity built used in the collateral gained can be used to obtain working capital in the future. Keep in mind however, that unsecured business lines not requiring collateral are available for businesses needing the extra working capital. Furthermore, the equipment that is bought can be counted on taxes as depreciation.
The Benefits of a Leasing Construction Equipment
The primary benefit of leasing construction equipment is that it offers great tax benefits to business owners. This is particularly true in a "true lease" where there is 100% deduction on taxes. If you do not know what we mean by a true lease, the Internal Revenue Service uses the term "true lease" to define how it is structured.
The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn't. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.
Most business owners like the notion of using a lease because you can get the equipment without a down payment or very little at all. So this eliminates the upfront costs involved in buying your own equipment outright. This makes it much easier on businesses that are startups especially. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.
Choose The Best Route For Your Construction Business
Whatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!
Construction Equipment Bought Utilizing a Business Loan
Heavy construction equipment does not become obsolete during the life of the equipment. Construction equipment is very durable. With proper equipment maintenence, heavy duty construction equipment will last for years past what a lease would offer.
Also once the business loan is paid off, the business owns the equipment. The business gains collateral as it builds accrued equity. This can be very valuable for future financing on the business credit. Equity built used in the collateral gained can be used to obtain working capital in the future. Keep in mind however, that unsecured business lines not requiring collateral are available for businesses needing the extra working capital. Furthermore, the equipment that is bought can be counted on taxes as depreciation.
The Benefits of a Leasing Construction Equipment
The primary benefit of leasing construction equipment is that it offers great tax benefits to business owners. This is particularly true in a "true lease" where there is 100% deduction on taxes. If you do not know what we mean by a true lease, the Internal Revenue Service uses the term "true lease" to define how it is structured.
The thing about a true release is that the business owner can claim the entire lease payment off on business taxes, To qualify for this status, the equipment must be declared at fault fair market value at the leases end. While all this sounds complicated, it really isn't. We do, however, recommend consulting with a professional tax consultant for more information on the ramifications of the tax benefits of leasing.
Most business owners like the notion of using a lease because you can get the equipment without a down payment or very little at all. So this eliminates the upfront costs involved in buying your own equipment outright. This makes it much easier on businesses that are startups especially. Lease payments are typically fixed for the term of the lease and give the business owner a good idea what to budget.
Choose The Best Route For Your Construction Business
Whatever option you go for, you need to consider where you need to put the money, the long term effects, how much you will save in terms of tax breaks and more. Plan ahead, and you will do fine with your construction business!
About the Author:
Need financing for your construction business? Wall Street Capital Financing can help! Read more at Financing Construction Equipment. You are welcome to reprint this article - but get your own unique content version here.
Aucun commentaire:
Enregistrer un commentaire