The Equipment Leasing and Financing Association (ELFA) has an excellent article about the strategic use of equipment financing to improve financial performance and capital productivity. We’ve summarized it for you below.
In today’s recovering economy, many businesses struggle to make outright purchases of capital equipment. Even with demand rising, financial limitations may hold back acquisition. That is where strategic use of equipment financing becomes a powerful advantage for enhancing financial performance and capital productivity. (equipmentfinanceadvantage.org)
Learn from Equipment Finance Industry Best Practices
The equipment leasing and finance industry has refined asset management practices over decades. These include systems for planning, acquiring, managing, and recycling assets throughout their lifecycle, right from delivery through installation, maintenance, and ultimately decommissioning.
Adopting these asset management strategies helps businesses make better use of their current equipment portfolio and avoid tying up extra capital in unnecessary investments.
Align Financing with Your Financial Goals
Financing decisions should link closely with financial objectives like cash flow improvement and return on net assets. Establish acquisition guidelines that align equipment use with those goals. Tracking maintenance and insurance costs also helps determine whether keeping equipment longer is financially viable.
Plan According to Equipment Life Cycle and Business Needs
Carefully assess how long your equipment will be used and the flexibility you require. Equipment use, obsolescence risk, and seasonal demand all play a role in determining whether financing or upfront purchase makes more sense. (equipmentfinanceadvantage.org)
Ready to Put Asset Management to Work?
By aligning financing with strategic objectives and asset life cycles, your business can preserve capital, optimize equipment productivity, and maintain agility. If you want expert help adapting these asset management approaches to your business, reach out to us today to explore tailored equipment financing solutions.
About TFC
Founded in 2004, TFC provides equipment financing services to a wide variety of companies from early stage to Fortune 100 and everything in between.
TFC and parent company, Kingsbridge Holdings (part of SLR Investment Corp.) have over $1B of assets under management.
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