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Trends in equipment purchasing and financing

FINANCING

As demand builds for new equipment and software, businesses weigh financing and leasing options.

Having the latest equipment is crucial for businesses to stay competitive. Upgrades comes at a price, but don't let that deter you. Instead, consider the different options for acquiring new equipment.

Capital improvement across all industries

Industries ranging from transportation and machinery to software and technology continue to invest in capital equipment. U.S. businesses, nonprofits, and government agencies are expected to spend more than $1.8 trillion on new supplies and upgrades in 2021. That would result in 7.8% growth in equipment and software investments for the year.1 In 2010, equipment expenditures totaled $676.1B.2

Future dollars will be distributed across many equipment types—with construction expected to see the heaviest investment, followed by medical, trucks and trailers, and technology.3 But all industries are showing signs of acceleration, potentially forecasting strong investment activity.4

Leasing vs. financing

By leasing your equipment, you can get the equipment or software upgrades you need without taking a big bite out of your budget. Many industry-diverse companies opt to lease equipment for the following benefits:

No need to budget for ongoing maintenance

No down payment

Tax-deductible expenses

Increased flexibility with timing

Some businesses prefer to use financing to purchase equipment outright, which has its own benefits:

Ownership—hold the legal title to the equipment

Tax-deductible interest—claim depreciation as a write-off

Low interest rate

By leasing your equipment, you can get the equipment or software upgrades you need without taking a big bite out of your budget. Many industry-diverse companies opt to lease equipment for the following benefits:

  • What's your monthly budget?
  • How long will you be using the equipment?
  • Will the equipment become obsolete quickly?
  • Is the equipment eligible to be leased?
  • How flexible are financing terms?

Equipment can quickly become outdated and obsolete—and a liability. Deciding whether to lease or buy business equipment depends on many factors, including the state of your business and your financial and business goals.

 

Explore all of your options.

Speak with your Truist relationship manager on the best way to invest in new equipment.

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