Machine Tool Equipment Financing
As a machine tool shop owner, you know that having quality, specialized equipment is high on your list of priorities. In fact, having the best equipment and knowing how to use it can be the difference between earning and not earning that new bid. When it comes time to buy that new equipment, you may not always have the capital ready to purchase. Many machine shop owners turn to financing that new equipment.
Benefits of Machine Tool Equipment Financing
Here are a couple of quick considerations for why you may want to finance or lease your Machine Tool Equipment:
- Preserve Cash
- Flexibility of Keeping or Returning Equipment
- Avoid the Pitfalls of Technical Obsolescence
- Tax Benefits
- Improves Debt Ratios
- Fixed Rate and Payment Options
- 100% Financing
As always, and especially today, cash is king. If you can manage to finance your largest assets and save your cash for other working capital needs, your business will be able to stay ahead of the pack. The most important thing to keep in mind is that your machine tool equipment is an income producing asset, and it will pay for itself.
Types of Machine Tool Equipment
Generally speaking, most machine tool equipment is considered to be good collateral. Larger pieces of equipment like the ones mentioned below can be financed from 1 to 7 years:
- Drilling Machines
- Grinding Machines
- Lathes
- Milling Machines
- Sawing Machines
- CNC Machines
- Radial Arm Drills
- Magnetic Drills
It is not easy replacing large, expensive pieces of equipment like this on a regular basis. A couple of considerations for that thought is deciding between a capital lease and operating lease. A capital lease will offer you the ease of purchase at the end of the lease term and allow you to keep the depreciation. The operating lease can potentially get you to a lower monthly payment and allow you to improve your debt ratios. And if you can afford the payments, it may also be a good idea to choose a shorter financing term in order to avoid committing your business to a long term lease or loan. Which ever option you choose, you can rest easy that you will not pay a single dollar for that piece of equipment until it earns you a dollar.
