Why You Should Purchase New Equipment
Equipment purchases are critical job responsibilities for any business owner. Some business owners get caught up deciding between new or used machinery. While many equipment financing options are available, consider the benefits of investing in new machinery. Here are some reasons to consider purchasing new equipment rather than used.
New equipment is usually faster, allowing you to roll more products off your production line. In addition, new technology can help you produce a better-quality product. This additional product can help you explore new growth strategies.
Just as manufacturing technology improves, safety technology increases. New equipment helps you invest in safer and more stable machinery. Workplace safety programs benefit from safer equipment. Just a few of the cost savings include:
- Medical expenses
- Business liability
- Property damage
- Wage replacement
- Insurance premium
New equipment typically lasts longer than older counterparts. Finding parts for maintenance and repair of aging equipment can be more difficult. In addition, hiring technicians trained to work on the older equipment is difficult. Keeping newer machinery in your facility helps you control maintenance expenses. In addition, you continue to use machinery well after the equipment financing loan is paid off.
Depreciation and tax deductions offset your tax liability. Depending on the tax code at the time, you may be able to write off 100% of the purchase price for your equipment. An accountant or tax professional can help you make the best purchasing decisions based on your tax status.
Most loans require that you provide collateral, making an asset available if you default on the loan. Equipment financing loans have collateral built into the loan structure. The equipment serves as collateral, helping to protect the bank.
Most new equipment loans have a lower interest rate than loans for older equipment. In addition, being able to find replacement parts easier lowers the ownership costs.
Leasing equipment can put a lot of inspection and maintenance demands on a company. In addition, you may need to limit the amount you use your equipment based on the lease contract. When you purchase new machinery, you have complete control over how and when your company uses the equipment.
Business owners should look for ways to establish a safe and updated workplace. Employees appreciate it when employers provide safe and efficient tools.
No matter the reason behind your decision to invest in new equipment, your company will reap financial rewards.