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Top Reasons Asset Financing Is a Smart Business Decision

If you have been handling your finances, you’ve probably heard agents or brokers mention assets and their importance to your business. You may have wondered what they’re talking about and why they think your business should care. In short, assets are anything of value that you own. They can be physical objects, like a building or a piece of equipment, or intangible, like a patent or a brand name.

When starting a business, you must consider how you will finance it. One option is to use your assets as collateral for a loan. This is called asset financing. Here are the main reasons financial asset solutions are a smart business decision:

1. When You Want New Equipment to Expand Your Firm

Companies that wish to remain competitive must eventually increase output and growth. And this expansion of production means buying new machinery that can help them improve their work and efficiency. However, before making this investment, companies must weigh the pros and cons carefully to ensure that the new machinery will be worth the cost. 

With asset financing, business owners don’t have to worry about whether or not their investment will be worth it in the long run. This is because they can use the new machinery as collateral for the loan. This way, they can be sure they will get their money back even if the new machinery doesn’t work out as planned.

2. When You Want to Save on Taxes

No matter how much you want to avoid them, taxes are necessary for running a business. However, that doesn’t mean you can’t find ways to minimise the amount you have to pay. Utilising asset finance is one approach to do this.

With asset financing, you can deduct the interest you pay on a loan from your taxes. For instance, if you’re a contractor and use asset finance to pay $100,000 for a new excavator, you may deduct the interest from your taxes. This can help you save significant money on your tax bill.

3. When You Want to Keep Your Cash

When you get a loan, you must pay back the borrowed money plus interest. This can strain your cash flow, especially if you’re a new business. 

Asset financial solutions can get you the money you need without worrying about monthly payments. This is because you don’t have to make any payments until you sell the new machinery. 

This means you can keep your cash in the bank and use it to grow your business. When you’re ready to sell the latest machinery, you can pay off the loan and keep the profits.

4. When You Have Bad Credit

Having bad credit may not qualify you for a traditional bank loan. However, that doesn’t mean you can’t get the financing you need. With financial asset solutions, your credit score is not a factor. This means you can get the funding you need even if your credit is not perfect.

Final Thoughts

By using assets as collateral, you can get financing at a lower interest rate than you would with a traditional loan. Plus, you can often get more flexible terms with asset financing. So, if your business needs some new equipment or vehicles, consider asset financing as a smart way to get the money you need.

Rpm Finance provides affordable and exceptional asset finance solutions to help you achieve your financial goals. Our firm belief is that loan products must be simple to comprehend and use and provide peace of mind. Contact us online through this link or call our team on 1300 209 496 to get a free quote today!

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