Equipment Acquisition – Is NOW the Time?
Businesses across all industries are increasingly optimistic about the future. For the first time in quite a while, companies are refocused on growth as opposed to survival. As this confidence continues to build, equipment acquisition will play an important role in meeting and stimulating market demand, and for many companies financing is an essential piece of the equipment acquisition process.
In fact, industry experts predict that seven out of every ten businesses (planning to purchase equipment this year) will use some form of financing to do so. This projected increase in equipment acquisition equates to businesses have a growing need for quick, convenient and smart equipment financing.
“Equipment acquisition drives supply chains across all U.S. manufacturing and service sectors” according to Equipment Leasing and Finance Association President, William G. Sutton. The association predicts investment in equipment and software will reach an all-time high in 2014, a record $1.5 trillion. Additionally, according to the January 2014 Monthly Confidence Index for the Equipment Finance Industry, the equipment finance market is at the highest confidence level in two years.
This optimism in the industry, coupled with our slowly rebounding economy provides a window of opportunity for businesses to capitalize on this confidence. These projections, coupled with the expressed needs of a multitude of industries, have prompted financial institutions to step up and develop smart equipment financing options that apply to a multitude of industries.
While acquiring the necessary equipment to expand and grow business operations is faster and more convenient than ever before, there are a few necessary steps that need to be taken prior to signing on the dotted line. First, the equipment acquisition process should begin with a thorough assessment of the business’ current in-use equipment. If current equipment has reached the end of its usable life and needs to be upgraded or replaced, look into possible resale or salvage value.
Next, the business should ascertain exactly what equipment is needed to support projected growth and long-term goals. Careful cost-benefit analysis will determine what equipment will provide the greatest contribution to efficient operations and deliver the highest return on investment.
Once the decision has been made, cost and finance options must be evaluated. While financing offered through your vendor may look good…call your banker and ask what options he or she has to offer. Explore your options. Spending a little more time on this step can save you a significant amount of money and frustration in the long run. Also, call your CPA or Tax Advisor. As with any major purchase, it is best to fully understand the tax implications and / or benefits before the deal is done.
In short, if it makes sense for your company, now is a great time to consider securing the equipment you need to support the growth of your business. Banks are eager to lend to qualified borrowers and interest rates and terms are very favorable. In example, Mission Valley Bank has just launched a streamlined Equipment Financing Program (with very favorable terms) that will enable our clients and surrounding business community the opportunity to acquire the equipment they need to grow their business.
Whether your business is considering a $50,000 network upgrade or $300,000 for machining equipment – now may be the time to purchase what you need to grow your operation. With such favorable terms and 100% financing available, it makes sense to explore the possibilities. Have questions? Call a Mission Valley Banker at 818 679 9463 or 661 312-8793. We are happy to help.