There are times when you’ll have to make an important decision that will affect several aspects of your business – and you have no choice but to take the lesser of two evils. A good example is buying new equipment.For companies that require a strong IT infrastructure, it’s critical to have the right hardware and software. These are expensive and can lead to some pretty costly problems.Equipment financing gives companies the flexibility they need to better manage their budgets. However, equipment finance will not only help you avoid problems, thereby saving you money, but it’ll also keeping you current with today’s technology.
Equipment finance allows businesses to acquire everything they need without a huge upfront payment. That’s because finance companies are ready to pay for the acquisition of hardware, software, and other services necessary for the business. They can even shoulder installation costs.Buying computers, servers, and other IT equipment is very expensive, and if you have a limited budget, you can be in trouble even before you start running the business. That’s because you either wait until you have enough capital or you dip into the budget allocated for operational expenses. Both will delay your growth.
The dilemma with buying new equipment is disrupting cash flow. You’ll have to take out a huge amount and put it on something that will take time to yield income. As a result, you’ll be left with little cash to use for daily operations. Cash flow concerns most Australian business owners. Because the costs of lending are high, it’s hard to find the resources needed to open and operate a business. Businesses need a decent amount of cash to start operating. This is where financing will come very handy.
Equipment leasing will help you get started right away. By working with lessors, you can get all the computers you need and set up networks without additional costs. The best thing about this is you are right on schedule. Leasing will keep you from waiting until you have enough capital or spending money that’s initially allocated for something else.
You don’t have to make large purchases. Hardware is very expensive and if you have to buy everything you need, you may not have much left for operational expenses (employee wages, office rent, etc.). You also don’t run the risk of going over the budget and can allocate what you’ve saved for other things. It makes a lot of sense to not spend a lot at the beginning because equipment like computers won’t immediately yield ROI. Your money can be better used elsewhere.
Computers deteriorate with time. The wear and tear they go through will affect how you work thus making it crucial that you keep equipment upgraded. You also need to update to the latest version of all the software you use. Servers can also crash.As your tools age, the costs become higher. You can replace them with new hardware but that’d be expensive. Through equipment finance, you can work on upgrades to reduce the risks of obsolescence, keep equipment updated, and implement proper life cycle management.
At times when you’re not making a lot of sales, keeping up with expenses can be tough because IT maintenance, software upgrades, employee’s wages, and other expenses remain the same. It’s tough to keep costs low and maintain high quality for your products and/or services. Finance companies can spread out low monthly payments for a fixed period so you can stay current even when the income is low.
Aside from freeing up your enterprise’s cash flow, equipment financing will let you take advantage of flexible payment schemes. You can negotiate fixed interest rates for a specified term so you won’t have to worry about fluctuating rates. You can then be able to better map out monthly expenses.Additionally, finance companies aren’t just limited to buying hardware for you. They can also help set up important services, like cloud computing, and take care of the administrative tasks.
Procuring computers, software, and other IT hardware no longer have to disrupt cash flow with equipment financing. Plus, you don’t have to worry about future risks that come with obsolescence and low-performing months. That being said, we highly advise that you use equipment finance companies, whether you’re starting a new business or want to find cost-effective ways to run your business. Most importantly, you don’t have to settle with choosing between two unpleasant consequences for making important business decisions.