How Equipment Finance Services are Empowering Modern Businesses

Highlights:

• A brief on equipment finance services
• Reasons behind the growing popularity of these services
• Potential developments in the industry

In today's fast-paced business environment, having the right equipment is essential for maintaining competitiveness and efficiency. However, acquiring new or upgraded equipment can be a financial burden, especially for small and medium-sized enterprises. This is where equipment finance services come into the role, offering businesses the flexibility and financial support needed to invest in key machinery and technology through financial solutions provided by banks, leasing companies, and specialized financial institutions. These services cover a wide range of equipment types, from heavy machinery and vehicles to IT infrastructure and office furnishings.

Reasons why equipment finance services are beneficial for businesses

Equipment finance services offer numerous benefits that significantly impact a business's operational efficiency and financial health. By using these services, businesses can pay for equipment over time through loans or leases instead of spending a lot of money all at once to buy it. This helps preserve working capital and allows businesses to keep funds for other important operations such as marketing, staffing, or research and development. Moreover, these services assist businesses in cash flow management. Regular, predictable payments make it easier for businesses to manage cash flow. This further enables them to maintain financial stability and avoid cash flows by aligning equipment costs with revenue generation.

Nonetheless, these promising services enable businesses to access technology and machinery without the burden of full ownership costs. This makes them more competitive and efficient. Additionally, businesses get remarkable tax advantages by availing these services. They can deduct lease payments or depreciation expenses from their taxable income depending on the jurisdiction and the specific financing arrangement. This allows businesses to get potential tax benefits.

Popular equipment finance solutions profitable for businesses

Equipment finance services come in various forms, each suited to different business needs and circumstances. Opening leases are one of the popular leases in which businesses can use the equipment for a fraction of its entire functional life. They have lower monthly payments and provide flexibility to upgrade equipment regularly. On the other hand, finance leases are long-term ones that typically cover the equipment’s entire useful life. At the end of the lease term, businesses have the option to purchase the equipment at a nominal price. In addition, sale and leaseback are a specific type of arrangement in which businesses sell their existing equipment to a leasing company and then lease it back. This can provide an immediate cash infusion while allowing the business to continue using the equipment.

Volta Trucks and Bluestones’ key initiatives

Several leading players in the equipment finance services industry have made profitable alliances to boost the industry’s competitiveness. For instance, in December 2023, Volta Trucks, a leading and disruptive all-electric commercial vehicle manufacturer and services provider announced its partnership with SGEF, a global leader and award-winning funder for equipment and vendor financing, to offer vehicle financing as part of Volta Trucks’ Truck as a Service (TaaS) solution. With this solution, the company aimed to offer a seamless, simplified, and tailored transition to an electric fleet. It provides seven turnkey product solutions, such as financing, insurance, and service & maintenance, enabling operators to maximize vehicle uptime and operational efficiency.

Bluestone, an independent finance broker collaborated with Siemens Financial Services (SFS) in April 2024 to offer its customers an end-to-end online platform that enables an auto-decisioning facility for their financing requirements. With this revolutionary facility with SFS, Bluestone’s staff are projected to contribute valuable time on more complex deals, eliminating manual processes of several types of transactions. Moreover, it opens the door to scaled business growth for Bluestone without having to continually employ new staff.

To wrap up, equipment finance services are an important tool for businesses looking to invest in essential equipment without straining their financial resources.  Equipment finance services allow businesses to maintain a competitive edge, manage their cash flow efficiently, and strategically plan for future expansion by providing flexible and cost-effective solutions. Whether through loans, leases, or other financing arrangements, equipment finance can provide the financial support needed to drive business success in a rapidly evolving market.

To gain insights into the global equipment finance services market and identify new markets for expansion, contact our experts here! They will also help you identify and mitigate risks associated with investments.

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