Reasons To Consider Machinery Finance For Your Business

Introduction:

It is roughly estimated that only about 50% of new businesses survive over the first year. At the end of 3 years, an even lesser number remains in the market – 10%. Only 3 out of 10 businesses enter into the first decade of their lifespan.  What do you think contributes to this significant decline?  Market analysts have viewed the sole reason for this vast change in scenario over time to be monetary issues. Without proper equipment for production and manufacturing, businesses run into a steady loss. Hence, Machinery finance is a crucial aspect to consider for running a business.

Why is financing important to a business?

Every business in any industry requires machinery to function. This is especially true in heavyweight industries. Examples include construction, manufacturing, freight, shipbuilding, mining industries, etc. They need equipment for daily workflow processes. Hence, they have to spend a fortune on these. These costs involve - purchasing costs and servicing costs of machinery. There is also cost involved with repairing and upgrading these types of machinery at intervals. 

Without machinery finance, these businesses have to deplete their cash reserves for their inventory. It will leave no room for marketing costs or employee hiring. Ultimately, it can lead to a devastating outcome for them.  

How does finance impact a business?

Finance is one of the most major factors that help in running a business smoothly. The amount of money you invest directly influences the growth of your business. How? 

The latest equipment will give you the best products or services. The most skilled professionals in the industry will take your business ahead. Widespread marketing will make your brand more visible in the market. All of this requires money.

Why you should consider machinery finance for your business?

To operate a business successfully, a multipronged approach is essential. And all of these require substantial capital investment. If your business involves mass production, investing in machinery is non-negotiable. In that case, instead of draining away all of your liquid cash, consider machinery finance. Here are a few reasons why you should consider machinery finance for your business:

1. Asset building:

Start-ups and SMEs look up to funding from investors. So, it is essential to present your business to them in a good light. More assets in your ledger increase the appeal of your business. 

Machinery finance helps you build your assets. This means your production increases. At the same time, you can attract potential investors and shareholders. 

2. Increased ROI:

Increase your ROI with machinery finance. How? It’s simple. Machinery finance means more production service disbursing capacity. This directly increases your marginal profit. The more your marginal profit, the greater your ROI. 

3. Bulk discount:

In the sales and marketing industry, there is a rule of thumb. The higher quantity you purchase, the more discount you get. It is no different when you buy machinery. 

Why lose the option of bulk discount when you know you will need that much machinery? Don’t worry about feeling the pinch in your pocket later on. With machinery finance, you will have a steady cash flow to meet other expenses of your business. 

4. Promote goodwill:

Let’s say an organization has an urgent requirement for the products or services you offer. It is unlikely that an MNC will take up bulk orders to deliver in a limited time. Naturally, the organization will look up to an SME for helping them out of the extreme situation. Now, what do you do when this opportunity comes to your door? Let it go out of that same door?

With machinery finance stocking up your inventory, you can meet their demands with precision. Most of the time, this one incident is just the boost that a start-up or an SME needs. If you can complete these orders successfully, it will promote your goodwill in the industry. It will serve as an impetus for your company to put its stake in the industry competition. 

5. Reduce tax expenditure:

Machinery undergoes depreciation. You can claim this depreciation on your tax return. 

6. Invest in marketing:

Marketing is no longer about gimmicking your customers. Consumers are educated and well aware of trends nowadays. They will only buy a product or service from you if you can point out its utility. You have to prove your calibre to your consumers. You have to make them realize what is the X-factor of your product or service that gives you the edge over your industry rivals. 

So, when you start a business or run it, you have to invest in marketing. And you have to invest quite a considerable amount.

Where does machinery finance have a role in this? Maybe not directly. But indirectly, the more free capital you have, the more you can invest in marketing. 

Conclusion:

Choose machinery finance for a safe and guaranteed foothold in your industry. This is because timely delivery of products and services is essential to survive in the long run.

Choose Finance Brokers Victoria for your machinery finance needs. We have helped SMEs and global enterprises alike to secure the best values on their finance options for the last 36+ years. Our expert team of brokers will guide you in the right direction. Because we believe in helping you achieve your long-term goals too. We help you secure a strong foundation for the survival of your business over decades and more.