Strategic Advice

Equipment acquisition: The benefits of long-term thinking Using strategic equipment financing to strengthen your company

Designing a long-term equipment acquisition strategy starts with two key considerations: whether your needs are suited to an equipment purchase or a lease, and whether your current finances and long-term goals are better served by self-funding the transaction or using third-party financing.

Both decisions are crucial to establishing a successful, resilient equipment acquisition strategy—and they may be related. For example, you may have to weigh whether you can get better financing terms for a purchase than a lease, or vice versa. Or they may hinge on a different factor, such as if owning the asset is critical to your company’s future.

Your Truist relationship manager helps simplify deliberations like these by applying a decision-making framework that weighs the merits of each acquisition strategy against factors such as your company’s history and cash flow. For example, if a lean early phase limited you to unfavorable financing terms but a move to a growth stage has provided you with excess capital or stronger access to credit, discussing these circumstances with your banker can enable them to work with you to find the right approach for your current circumstances and future goals.

To better understand the nuances of these and other equipment funding scenarios you could encounter throughout the business lifecycle, here are some insights on building a long-term equipment acquisition strategy that can strengthen and grow your business.

Reassessing your options

In its early lifecycle stage, your company may have taken a straightforward approach to equipment financing. You likely chose the funding method that met your immediate, practical needs and had the least downside.

But as your company transitions into a growth or established stage, revisiting some of the options you initially passed over—and adjusting your approach to financing equipment acquisitions—can help your business achieve long-term success.

“If a growth or established stage business takes the long view on equipment acquisition, they might notice third-party financing options can be a much better fit,” says Scott Lackovitch, managing director and head of commercial originations at Truist.

A horizontal rectangular box features a large circle on the left and four stacked lines of text on the right. Inside the circle is 59%, outlined by a thick border. Approximately two-thirds of the border is light blue, with the remainder in lavender, visually representing the percentage shown. To the right of the circle, the text reads: The percentage² of equipment financing industry volume provided by bank lenders in 2023. Below the circle, fine print reads: This figure represents equipment financing through leases, loans, or lines of credit.

Deciding whether to purchase or lease

What are the benefits of leasing vs. buying equipment? Few questions are as important in helping achieve an optimized acquisition strategy as this one. That’s because contrasting the benefits of each method is integral to enabling informed choices that align with both your current needs and long-term goals.

Here’s a quick comparison of the advantages of purchasing and leasing that you can bring into discussion with your internal team and outside trusted advisors, such as your Truist relationship manager.

Purchasing advantages

Own the equipment
Count machines and tech as assets that can increase enterprise value
Decrease your lifetime equipment costs
Utilize value depreciation for tax benefits
Generate alternative funding through equipment resale

Leasing advantages

Eliminate down payments and reduce upfront cash requirements
Preserve working capital
Upgrade, install, and maintain equipment with greater ease
Deduct monthly or quarterly payments from taxes
Enable faster equipment acquisition with expedited approval processes
Accelerate your return on investment^{Disclosure 1}

A lease versus buy equipment analysis should be conducted within the context of your business’s individual circumstances to determine if purchasing or leasing is the better fit. After choosing a method, you should note the specific advantages that drove you to select one category over the other. These will serve as the cornerstones for building your acquisition strategy.

Bank-owned leasing gives you a trusted partner to negotiate terms with a manufacturer from a position of strength.
—Scott Lackovitch, Managing Director and Head of Commercial Originations, Truist

The adaptability of third-party financing

If you decide to pursue third-party financing, you’ll need to choose between lines of credit, loans, and leases. Your Truist relationship manager can help you select the most advantageous approach by modeling various scenarios, then using our collaborative approach to bring in specialists who can help identify and implement the method of financing best suited to your needs.

For example, let’s say an established-stage healthcare provider needs to increase the inventory of MRI machines in its hospitals. MRI technology evolves quickly, making frequent upgrades a primary equipment acquisition concern. It’s a technology that also requires reliable, fast installation and maintenance, which could literally be the difference between life and death for patients.

Those key considerations make the benefits of equipment lease financing stand out. Unlike purchases, leases can be more easily structured and readily negotiated to ensure each machine and service is delivered to required specifications. In addition, features common to virtually every form of equipment leasing—like expedited approval processes and low-to-no upfront payments—can help you get needed equipment as fast as possible.

You may think of a lease as something you set up directly with the seller, such as when you lease a car. But just as auto dealerships have financing arms, when you lease a large piece of equipment, you may have options regarding who provides the lease.

A bank is one of those options, and banks accounted for 59% of all equipment and software financing across all industries in 2023, including 84% of medical equipment financing.^{Disclosure 2}

“Bank-owned leasing means you don’t have to work all the details out yourself—you’ve got a trusted partner to negotiate lease terms with a manufacturer from a position of strength,” says Lackovitch. “The same goes for independently vetting the quality of installation and maintenance crews or haggling over servicing costs. With a lease that bundles these aspects, that can all be taken care of so you don’t have to.”

A horizontal rectangular box displays the headline Most financed equipment verticals². Below the headline are six equipment categories listed vertically: medical equipment, industrial equipment, construction machinery, automobiles, furniture, and software. Each category is paired with a horizontal bar showing its share of financing: medical equipment (84%), industrial equipment (78%), construction machinery (78%), automobiles (54%), furniture (59%), and software (51%). Fine print below the final bar reads: Percentages reflect financing through leases, loans, and lines of credit.

The strategic benefits of leasing

Here are the most common benefits of choosing a lease for your equipment financing.

Tax advantages
One of the primary financial benefits may be the ability to write off lease payments as a business expense by deducting the monthly payments from your taxes.

Asset management
Leasing allows a trusted banking partner to capture key benchmarking details about your equipment and its maintenance that can help provide formal or informal asset management strategies

Alternative funding sources
Capital leases enable you to own the equipment at the end of your term. This provides the benefits of leasing while delivering a balance sheet asset. You can then sell or lease your owned equipment to provide secure funding and improve your cash flow.

Mitigating labor shortages
In a fluctuating job market, you can structure leases with provisions that enable the fast, affordable addition of equipment. This strategy can mitigate the impact of labor shortages and allow for uninterrupted growth.

The advantages of long-term thinking

At its best, a long-term equipment acquisition strategy creates a cycle of improvements that feed into one another. Preventing equipment obsolescence through smart acquisition leads to capital efficiency, accelerated return on investment, and balanced budgets with surpluses for hiring, marketing, and other functions.

“Once you’re out of the early stage, you’re in a position to use the flexibility of third-party equipment finance to coordinate efficiency across the whole company,” says Lackovitch. “And whether it’s equipment acquisitions or growing in new markets, the all-encompassing nature of Truist Business Lifecycle Advisory is built to help you do exactly that.”

Ready to build your long-term strategy?

Contact your Truist relationship manager for custom solutions to meet your evolving needs.

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09/12/2025

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