Keeping Money In Your Pocket by Financing Vehicles & Equipment
You have money in the bank to pay for a new piece of equipment or a new motor vehicle. Why would you choose financing these items?
The answer is simple. Funding these items in 2015 is cheaper than at any other time in recent history. Even if you have the cash, investing it in growth items for your business, or your private growth will probably make you more than it will cost you to fund new vehicles or equipment.
Common things that have the potential to make you more money or save you money.
1. Pay off more expensive debt – credit cards, overdraft etc.
2. Invest in property or shares
3. Maximise your Superannuation payments
4. Purchase stock or goods for resale
5. Increase your advertising budget
Having excess cash is an enviable position to be in. You probably work very hard for it. The question you need to answer is. Do I have enough money to retire? If not you should be in investigating methods to increase your wealth to make you comfortable in retirement.
Borrowing money can be extremely effective in increasing your profit margin and wealth provided you are sensible in your choices.
If you don’t have enough money to grow as much as you want, then using finance agreements can be a very good option.
1. Growth is Cheaper – The purchase and use of a piece of equipment or a motor vehicle is going to make you more money than the funding costs.
2. Not upgrading will cost you more – Your equipment or motor vehicle is outdated, it’s lack of efficiency or repair costs are costing you more than funding costs of something new.
3. Tax Deductible – All equipment and motor vehicles for genuine business use are fully tax deductible.
Sensible borrowing when your capital is low, can improve your businesses profitability substantially.
A word or warning don’t just go out and buy something new under a finance agreement just because you can. The purchase and funding should either add to your bottom line or solve a real problem. If it doesn’t then you aren’t keeping money in your pocket.