Planning for the growth of your business means learning to think in years and decades, not just weeks and months. Each time you make a purchase, you need to know what you’re getting, not only in terms of productive capacity or quality control refinement, but also in terms of operating life and range of uses. When it comes to your equipment, that means making the call about whether to invest in a purchase or a lease, and it also means figuring out what level of investment to make. If you dig too deep into your reserves to buy the best machines out there, you could hamper your ability to invest in all the equipment you need. On the other hand, if you go cheap, the speed of obsolescence could leave you buying replacements while you’re still paying your loans.
When Buying Is a Great Strategy
Equipment that you’ll need to replace quickly is often too costly to buy, but incredibly accessible when leased. One great example would be office computers, which typically need to be replaced every three to five years for the best possible efficiency, and at least every eight to stay on top of the current OS and security software. On the other hand, an infrastructure purchase like an anodizing tank is a prime opportunity to get equipment you’ll own outright once it’s paid off so you can maximize its return. Properly cared for, a tank can last for more than a decade, and investing in a high quality option with a capacity above your needs means being poised to take care of customers with unconventional requests.
Financing Large Equipment Purchases
It can be hard for smaller companies to finance the purchases they need to build the infrastructure that lets them become medium-sized regional businesses. If that’s the case for you, look into programs like the SBA’s 504 loans for equipment, because they can help you make the purchases needed without depleting your reserves, and the terms on equipment loans from the administration are designed to help you minimize the monthly overhead so your return comes more quickly, with repayment stipulations that encourage reinvestment.