By offering financial flexibility, financing might be the best way to preserve your company’s ability to use the Section 179 deduction. Equipment purchases exceeding the $800,000 limit could jeopardize the amount of Section 179 write-off, if any, that a company is eligible to take. With financing, you do not run the same risk.
Financing acquisitions that exceed $800,000, allows the finance company to be the tax owner of those assets and enables your company to retain its Section 179 deduction. Plus, using a lease to finance acquisitions allows you to trade in un-used tax benefits in return for an overall lower cost of financing. As with all equipment financing, depending on the structure, a lease could result in improved cash flow and financial statement ratios.
To find out more, contact our office for information on equipment financing. And don’t forget to check with your own financial advisor prior to entering into any equipment finance arrangement.