Capital Budgeting

Equipment Financing Tip #2

Look Ahead. Purchase your equipment before you really need it. One of the easiest ways to end up in a bad equipment leasing deal is by waiting until the last minute to finally buy that piece of equipment. If you forecast correctly, you will know ahead of time what big equipment purchases will be coming up in the next 12 months. This allows you the opportunity to begin your vendor selection and your equipment leasing company selection before the equipment needs to be installed.

What you don’t want to do is wait until that big order comes in and then start the equipment purchasing process. Several things can happen that will leave you worse off:

• The equipment does not get installed in time, and then you miss a big order
• You rush the whole process and end up buying more or less equipment than you needed
• Feeling pigeon-holed, you take the first offer that a financing company gives you

Every one of those potential happenings result in your business losing money. You could lose hundreds, even thousands of dollars by not properly budgeting and leaving yourself ample time to purchase the equipment.