5 Reasons Why Businesses Get Equipment at Year’s End

Why is the end of the year such a popular time for businesses of all types to get equipment?

The answer is simple: to take full advantage of the financial and tax benefits that come with purchasing equipment at the end of the fiscal year.

But what exactly are those benefits, and is it worth getting in on this trend? Read on to find out!

5 Reasons Why Businesses Get Equipment at Year’s End

  1. Immediate Write-Offs: Section 179 of the IRS tax codes allow business owners to deduct the FULL purchase and leasing prices of ALL equipment costs up to $1 Million dollars during the fiscal year. This means that business owners that purchase or lease equipment can deduct the full price of their equipment costs from their gross income for their return the following year. This gives businesses the chance to completely write off their equipment immediately, with their deductions immediately showing on their 2019 tax returns.
  2. Bonus Depreciation: Depreciate up to 40% of business equipment costs-while you still can. Next year, the tax code will change to allow only up to 30% bonus depreciation, and most likely even less as the years go on. So to save the most on the cost of your equipment, the time to finance your purchase is now!
  3. Save on Operational Cash: By funding your new equipment through a financing company like NBC&S, businesses eliminate using any free cash needed for operations. By financing the equipment you still get full write off, saving thousands in taxes, more than enough to cover any interest payments! Plus you avoid depleting any cash on hand.
  4. Use-It-Or-Lose-It Funding: Another common reason for businesses to purchase equipment at year’s end is to spend their use-it-or-lose-it funds in their budget. Not doing so typically results in the funds getting absorbed back into the company, and most likely will be cut from the company budget the following year. Ensure your business receives another comfortable spending budget next year, and get any new equipment your company needs – before the available funds disappear!
  5. Spend Surplus of Operating Funds: It’s always tempting to put away funds you’d otherwise use on operating costs when you have a surplus. However, it’s also a smart idea to take advantage of times when spending money comes easier. You never know when you’ll have the funds to get that new piece of equipment you’ve been needing for so long. And besides, new or upgraded equipment can only increase your future earning potential, and save you more capital in the long run!

Here’s How it Works:

Let’s say you receive $100K in taxable income.

The equipment you need costs $100K.

By financing your equipment, you can depreciate 100% of your equipment costs if they are made before 2019, ultimately wiping out your taxable income.

This results in equipment purchases that are essentially tax-free. And what’s more, by financing your equipment, the money you save can be used to eliminate up-front fees and insurance costs, saving you anywhere from hundreds to thousands of dollars!

How to Take Full Advantage of Equipment Tax Benefits

As stated before, you won’t feel the full effects of the benefits above unless you finance your equipment through an alternative financing company like National Business Capital.

Only companies like NBC can offer businesses the chance to save time and money by eliminating upfront fees, and capitalizing on the full tax deductions and bonus depreciation offers available to small businesses.

With larger offers, lower rates, and flexible terms, NBC specifically offers the best equipment financing options for leasing, purchasing or upgrading machinery and IT equipment for businesses from every industry.

Equipment Financing Qualifications

Unlike most financing companies, NBC’s equipment loan approval process does NOT require you make a minimum in annual gross sales, have a minimum amount of time in business, and does not depend at all on your credit score.

All you need get equipment funding from NBC is a solid plan for how your new equipment will help you grow!

To get the cash you need for new or upgraded equipment in as little as 24 hours, call us at (877) 482-3008, or apply online by filling out our 60-second application, and we’ll start helping you take full advantage of the tax benefits to come – before the fiscal year comes to a close!

About the Author, David Surrusco
David Surrusco is the Head Content Writer at National Business Capital, is best known for his work in creating what has become the best business financing blog known to mankind: The NBC Advisor.