Finance Agreements

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Are you looking to invest in new spray foam, coatings, or slab-lifting equipment for your business? Understanding the difference between a loan and a lease—and knowing how to select the best finance product—can have a big impact on your cash flow and long-term success. Here’s what every equipment buyer should know:

• Loan (Equipment Finance Agreement):
  
  • You own the equipment at the end of the term, often for a nominal buyout (like $1).​
  • Payments are typically over 2–5 years and are slightly higher than lease payments.​
  • You may be eligible for tax deductions such as Section 179, allowing you to deduct the full equipment cost upfront. Interest and depreciation can also be deducted.​
  • Useful if you want ownership and control from day one.

• Lease:
  The lender technically owns the equipment during the lease term; you make fixed payments for 2–5 years.​
  • At the end, you can return, buy out (often 10% of original price), or upgrade the equipment.​
  • Payments are lower and 100% tax-deductible as operating expenses, not capital assets.​
  • Leasing requires less cash up front, preserves working capital, and offers flexible return/upgrade options.​

1. Evaluate Your Cash Flow and Budget: Financing spreads the cost, so you preserve cash for payroll, marketing, and growth.​
2. Consider Equipment Lifecycle: Lease terms can be matched to useful equipment life; financing is ideal if you want to own for the long haul or the equipment has a long useful life.​
3. Down Payment & Approval Speed: Expect to put down 5–10%. Fast approvals (sometimes within 24 hours) are common.​
4. Tax and Reporting Benefits: Loans help you build equity and offer depreciation and interest deductions; leases maximize operating expense deductions.​
5. Upgrade and Growth: Leasing makes it easier to upgrade technology and bundle multiple items into one payment.​
6. Customization: Choose terms (12–72 months) and buyout options that best fit your business plan.​

• Always check with your accountant about Section 179 deductions for new investments.​
• Review vendor payment terms and shop for competitive rates—factor, not “interest”, applies on leases.​
• Strong banking relationships can unlock better deals and future growth opportunities.​
• Consider service, warranty, and insurance needs as part of your finance strategy.​

By strategically structuring your loan or lease, you can invest in top-tier spray foam, coatings, or lifting equipment, maximize your tax advantages, and prepare your business for smart growth. Drop any questions or message us for a free equipment finance consultationon!