Follow Derek Linkedin
Email Derek Email
Financial
Jan 9, 2017

Equipment Financing To Grow Your Business

Sponsored Content provided by Derek Cohen - Senior Vice President of Commercial Banking , Bank of America Merrill Lynch

Putting equipment and capital to work helps businesses grow. But did you know that financing - instead of purchasing equipment for cash - can be a powerful tool, enabling you to acquire and upgrade important assets while securing tax advantages, managing risk exposures and strengthening your balance sheet?

Many business owners are having tax planning conversations and thinking about capital needs for the year ahead. Recently I worked with a local business that is planning for its expansion, and equipment financing was a key part of the growth plan.

Here is what you should consider to determine if this strategy is right for you:

  • As you conduct business in more ways and places, have your business equipment needs changed?
  • How do your accounting, tax and cash flow goals impact your ability to negotiate the lowest cost?
  • Is it time to update old technology, replace worn assets or add new equipment to expand your capabilities?
  • Did you know you may be able to negotiate better pricing for equipment and react quickly to special offers from manufacturers by qualifying for financing early?
  • Should you consider financing 100% of your equipment cost?
  • What are the tax and non-tax lease implications?
  • Should you consider a TRAC lease (for commercial vehicles)?
Many business owners are considering these opportunities to take advantage of Federal tax incentives, efficiency gains provided by new equipment and rates that are historically low, although recently on the rise.  

The Omnibus Spending and Tax Extenders package passed by Congress at the end of 2015 retroactively and prospectively extends bonus depreciation at the recent 50 percent level for qualified new Modified Accelerated Cost Recovery System (MACRS) property placed in service in 2016 or 2017, provided it meets all existing eligibility rules.

If bonus depreciation will create more depreciation than you can use on your tax return, consider buying new equipment through a tax-oriented lease. Under the lease, your lender will claim the bonus depreciation, thereby reducing your cost to borrow.  A tax-oriented lease may lower your cost of capital, versus a standard term loan, and allow you to expense lease payments fully on your federal tax return.

Whether you are looking for equipment leasing or conventional equipment loan financing, it’s important to have a partner that can help you find flexible, customized options for your equipment needs and the overall growth of your business.

Derek Cohen is Senior Vice President of Commercial Banking for Bank of America Merrill Lynch, where he delivers strategic financial advice and solutions to help companies grow, improve liquidity and cash flow, manage U.S. and international payments, and invest for the future. Derek also serves as Market President for the greater Wilmington area for Bank of America, working to strengthen communication and integration among the company’s local businesses. Contact Derek at (910) 442-1860 or [email protected].
 

 

Gbam localmarkets 300x250
Ico insights

INSIGHTS

SPONSORS' CONTENT
Chris coudriet headshot 300x300 10211545555

Adopted Budget Saves Taxpayer Money and Makes Strategic Investments

Chris Coudriet - New Hanover County Government
Billhunter300x300 b&w

USP: Give Me A Reason to Do Business with You

Bill Hunter - Wilmington Design Company
Volety 0020 1121724229

UNCW to offer N.C.’s first Actuarial Science Certificate Program

Aswani Volety - UNCW College of Arts and Sciences

Trending News

Chops Deli Co-owner Explains Financial Woes Behind Fundraising Campaign

Jessica Maurer - Jun 18, 2018

Hendrick Automotive To Operate Stevenson Honda Of Wilmington

Johanna Cano - Jun 19, 2018

At ILM, Regional Carrier's Technical Issues Cancel Flights

Christina Haley O'Neal - Jun 18, 2018

Plan A Advertising Adds Recent UNCW Grad

Christina Haley O'Neal - Jun 19, 2018

During Port Of Wilmington Visit, Cooper Says Port Jobs, Growth Good For NC Economy

Christina Haley O'Neal - Jun 19, 2018

In The Current Issue

Construction Zone: Updates On 4 Commercial Projects

Current commercial building activity in Wilmington includes retail and office space, with more planned in the coming years throughout the ar...


Labor Market Checkup

The demand for health care workers in an area like the Cape Fear region is expected to remain healthy for years to come, experts say....


Banks Respond To Dodd-Frank Changes

Just how will the much-trumpeted recent changes to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act affect local financial...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes