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Preserve Your Working Capital with Equipment Financing

Updated: May 2, 2019

Financing the growth of your company always comes down to dollar and cents. When you need to add machinery to increase your capacity, it is not only the price of the goods to consider. One must also understand the associated costs to operate the new equipment which include training, installation and set up. Normally an organization would look to their working capital to finance these expenditures. The challenge is having enough working capital to cover your existing operations and the additional expenses that come with the new machinery; not an easy thing to do.

You have options and you do not need to solely rely on your working capital. Financing new machinery is a great option. Not only does it preserve your internal financing resources, it allows you to use the production that comes with the new equipment to pay for it. Both large and small businesses use equipment financing to invest in growth while managing cash flow and the company’s balance sheet. The benefits of financing allows you to conserve working capital and keep your bank lines of credit open. You also avoid any restrictions on existing covenants and facilities. The accuracy of financial forecasts and budgets is improved by having predetermined payments. Furthermore, it enhances your purchasing power by giving you the option to add additional equipment or higher-end equipment, all while giving you the flexibility to respond to industry and technological changes.

Determining the return on investment (ROI) when purchasing machinery should always factor in the working capital expenditure. Longer term financing has a dramatic effect on the ROI and will considerably improve the payback of the purchase. This is a big win for companies who are looking to grow, add product lines and out manoeuvre their competition. The benefits of using equipment financing are clear: by securing financing you eliminate the inevitable crunch on your working capital as you add capacity to your organization. A winning scenario for all.

Moving forward, look to protect the financial health of your organization by utilizing financing as an option for your next machinery purchase.

Ed Walsh


Elevate Export Finance Corp.

+1 (416) 735-9480   

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