While truck financing isn't the world’s best kept secret, there are a few things you’ll be surprised to hear

It can take years of saving before a septic business has the funds on hand to buy the new truck or piece of equipment it really needs to grow. But what if it didn't have to take so long?

It turns out there’s a way to get what you need without going broke. Equipment financing helps you break down the cost into manageable payments. While truck financing might not be the world’s best kept secret, there are definitely a few things you’ll be surprised to hear. Check out the following four benefits of financing your pumper equipment.

Tax benefits

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The most obvious tax benefit is the Section 179 tax deduction. It’s one of the best perks of financing equipment. The deduction allows a business to deduct all or part of the purchase price of qualifying equipment. Now, if you already know about Section 179, don’t quit reading just yet. There’s another tax benefit to take advantage of.

Another great way to benefit from your financed equipment is 50 percent bonus depreciation, which allows you to deduct a large chunk of a long-term asset’s cost, making it a great advantage of acquiring equipment.

Until 2019, businesses of all sizes will be able to depreciate a certain percentage of the cost of their equipment. For equipment financed and put into service during 2015, 2016 and 2017, you’ll be eligible to depreciate 50 percent of the cost. In 2018, the percentage will phase down to 40 percent, and then 30 percent in 2019.

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When combined, these tax benefits make a mighty compelling argument for financing your next truck.

Credit improvement

As a small-business owner, you probably know that having strong credit makes life easier. What you might not know is that you can build up your credit by using financing to buy equipment. But before discussing the ability to strengthen your credit, let’s get one thing straight — you don’t need perfect credit to finance the equipment you need for your business. A flexible lender will look beyond your credit strength and help create the perfect plan.

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Once you have a plan that supports your growth, making payments on time every month will do wonders for your credit. With a better credit score, it’ll make financing in the future easier, and if you ever need a capital loan, it’ll help then too.

Keeping cash flow stable

Cash flow is a relatively common business term used to talk about incoming and outgoing funds. As you already know, having cash in the bank is a pretty important part of running a business. Without liquidity (having cash on hand for business use), a business can easily run into financial trouble. Imagine landing an important job the day before a key piece of equipment breaks. If you don’t have cash available to pay for immediate repairs, you’re out of luck. Both stable cash flow and liquidity are so important that businesses without them tend to fail.

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With that knowledge under your belt, you know the last thing your business needs is a hole in the balance sheet. Even if your business is flush with income, sinking a large percentage of your incoming cash into a new piece of equipment isn’t always the wisest choice. Filling that gap with incoming funds could be difficult, especially if the new equipment will take a bit of time to start bringing in higher profits.

Financing your equipment offers a great alternative to letting your cash flow suffer. When you finance or lease-to-own equipment, the cost is broken into manageable payments spread out over a set number of months keeping your outgoing cash flow steady and preventing a dip in incoming funds.

Building powerful relationships

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Though perhaps not as exciting as the prospect of getting money back in your pocket or helping stabilize your cash flow, building a relationship with a respected lender in the industry is a great perk of financing. By finding a lender you trust, you gain valuable insight into the process and benefit from years of experience.

A truck financing consultant that’s been in the game for a while can give you all kinds of advice, from figuring out what kind of plan to pick, to recommending good trade shows. On top of it all, once you finance a truck, it’ll be even easier to do it again in the future.

Bonus benefit for dealers

Did you truck and equipment dealers out there think you’d be left out of the benefits? The amount of benefits dealers get from having a preferred financing partner would take an entire article to explain, so let’s just cover the big one for now. When you work with a specialized financing partner to offer financing as an option to your customers, you don’t have to worry about deals taking longer, monthly payments not being made on time, or losing potential buyers to cost.

An equipment financing company specializing in pumper trucks and equipment knows the industry and understands that as soon as the truck leaves your site, you need the profit in your bank account. By offering customers financing via a flexible and knowledgeable lender, you’ll close more deals and get paid up front and in full. No waiting around for checks to clear or wondering if a payment will arrive in your account each month.

Of course, there are other benefits to financing your next truck, like being able to afford more and having your equipment basically pay for itself, but these four seem to be overlooked by business owners when they can substantially help your business thrive. Next time you consider expanding your fleet or adding new equipment, keep these benefits in mind. Pretty soon, you’ll be wondering why you ever thought of paying with cash.

About the author: Ryan Driscoll is a business development consultant at Beacon Funding, a leading equipment financing company. Ryan has been in finance for over 16 years, and 12 of those years have been dedicated to commercial vehicle leasing. For more information, contact Driscoll at 347/532-7878 or RDriscoll@beaconfunding.com.

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