The Best Way to Finance External Power Sources

Financing Power Generators
Financing Power Generators

The Best Way to Finance External Power Sources

Almost everything we do runs on some sort of electrical power. This is true for our home appliances, and is especially true for businesses, both large and small.

When deciding what equipment will benefit them in their day-to-day operations, most business owners don’t consider power sources as a strong contender, but not investing in this area could prove to be a big mistake.

In this article, we’ll go through why having a dependable power source is so important in our day and age, we’ll take you through the different options at your disposal, and we’ll show you how privately financing generators and other power sources is probably the best choice.

Why External Power Sources Are Important

To be clear, we’re talking about external privately-owned power sources, not government-provided ones. The type of business you’re running has a big impact on the necessity of having a power source in the first place, but almost all businesses will benefit from its implementation for the following reasons:

1. Power Outages

The biggest and most obvious reason for investing in an external power source like a generator is for cases like power outages or breakdowns. This might seem like a non-issue in developed countries like the US, but it happens a lot more frequently than you might think.

Areas that suffer from bad weather are severely affected by this. Louisiana, as an example, suffered from almost 181 million outage hours in 2020. That’s a lot of time and money wasted. Having a backup power reserve will offer a short-term solution to this.

Your work will not have to come to a standstill and your equipment will still be able to keep working.

2. Power Fluctuations

Besides outages, electricity also fluctuates very frequently. This is a big problem, especially for manufacturers. Machines and robots operate best at specific wattages and fluctuations make inefficient circumstances for large-scale production to take place.

Over time, these conditions can damage your equipment or could result in a short circuit or malfunction. The best way to combat this is to have specialized equipment designed to keep your machines running at the input they perform their best at.

3. Security

We’ve already discussed how power outages can create problems for businesses, and a big one is the compromised security of your workplace.

Power outages offer the perfect conditions for thieves to operate in. Having at least your lighting and security system connected to a backup generator will do wonders in warding off people who want to harm your business in any way.

4. Services Keep Running

This is a vital point for businesses like Wireless internet service providers.

It is essential that servers or transmission dishes keep operating in all circumstances, so having these hooked up to an external power source is a necessity for corporations in this niche. Not doing so could result in a decline in your customer satisfaction and could damage your expensive equipment.

Your data is also secured when you implement an external power source. Computers shutting off unexpectedly could result in you losing precious information in an instant.

Types of Power Sources

Now that we’ve gotten an overview of the benefits of having an external power source, let’s look at some of the options at your disposal:

Generators

The most common choice for an external power source is a generator. They have the most utility and can (and should) be used by almost everyone.

The type of generator that would be useful for businesses is a standby generator for the following reasons:

  • Operates automatically
    ● Offers permanent power protection
  • Can use many fuel types
  • Can boot up in seconds minimizing power loss duration
  • Always monitors utility power
  • Best used in systems like elevators, lighting, medical equipment, server protection, and emergency fire systems.

Renewable Energy Sources

A newly emerging segment of power sources is entirely focused on generating electricity through renewable sources of energy like solar, wind, water, etc.

The most commonly available and successful form of renewable energy at the moment is solar which is what we’ll focus on right now. Solar panels work in the same way as generators but with some key advantages:

  • Unlike generators, solar uses the sun to generate electricity. This saves fossil fuel usage and reduces your business’s dependence on these scarce resources.
  • Solar greatly reduces electricity costs. This is because the system cuts down your reliance on the grid, helping you save massively in monthly electricity bills. As power is one of the biggest fixed costs businesses face, dramatically reducing it could prove to be a huge advantage.
  • A greener public image. How people perceive your business and work is incredibly important in today’s business climate and committing to renewable energy sources like solar will help boost that.
  • Solar energy future proofs your business. In the future, almost all businesses will have to adapt to renewable sources of energy to operate on as our fossil fuel supplies are dwindling fast.

How to Finance to Industrial Generators and Solar

The cost of implementing alternative power sources into your workflow varies significantly and could be as little as buying a small portable generator to a several hundred-thousand-dollar overhaul.

Regardless of the actual financial weight of your decision, you have two main options for financing it. Either by taking a bank loan or through private financing companies like Dimension Funding.

Bank loans are hard to get, difficult to pay off, and can be a classic case of biting off more than you can chew.

Private financing on the other hand is a much quicker, safer, cheaper, and more reliable way to get your power source financed. Here’s why:

  • Fixed monthly payments. You don’t have to worry about fluctuating interest rates or calculating how much you have to pay each month. Private financing lets you choose a low monthly payment for up to 60 months. You know exactly how much you have to pay and the agreed amount during the signup process never changes.
  • Finance up to $250k without financial documents. An application-only option allows you to purchase the external power source solution you need quickly. There are no lengthy application processes or reviews and if you need more than $250k then all you need to do is provide your financial statements.
  • Finance 100% of the costs. Just buying the equipment isn’t the end. You have to set it up, train your staff to use it, make room for maintenance costs, etc. Private financing companies like Dimension Funding take care of everything for you. All these costs are taken into account and are included in your principal amount.

We hope this article has helped you better understand the benefits of having an alternative power source and how it can streamline your workflow and prevent unpleasant surprises, in the present and in the future.

If you’re interested in financing your external power source solution through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time-tested, hassle-free, and convenient financing option for your next equipment upgrade.

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Everything You Need to Know about Buying Commercial Vehicles Under IRS Section 179 in 2021

Purchasing Commercial Trucks Under IRS Section 179
Purchasing Commercial Trucks Under IRS Section 179

Everything You Need to Know about Buying Commercial Vehicles Under IRS Section 179 in 2021

Investing in your business’s operations and workflow is an essential step to progressing in the ever-increasing competition of the current corporate climate. Small changes add up and could mean the difference between you winning customers over or losing them to your better-equipped competitors.

Acquiring equipment, including commercial trucks, is essential for this very reason. It helps you produce more efficiently, deliver more widely, and ultimately enhances every aspect of your business model. The problem is the cost. Most equipment, especially commercial vehicles, is prohibitively expensive. Most small businesses may find it very difficult to justify this type of expense, but fortunately, there is a silver lining.

In this article, we’ll tell you about the 2021 Section 179 tax deductions, we’ll tell you how your next vehicular upgrade can benefit from this, and we’ll give you some commercial truck financing options you may not have considered.

IRS Section 179 Tax Deductions Explained

Before we get into vehicle acquisition itself, we have to understand the 2021 Section 179 tax deduction and how it can benefit you.

In a nutshell, Section 179 of the Internal Revenue Code gives you the opportunity to deduct the cost of approved equipment as a business expense during the tax year. You can essentially absorb the purchase price of said equipment into your business’s overall expenses.

This is useful for small organizations especially as they can upgrade their equipment or purchase new capital to produce better products and offer a higher quality of service to their consumers, without the heavy investment costs that would plague them otherwise.

This is beneficial to the business and the economy, as more commercial activity is a hallmark of a healthy, thriving country. Amidst a global pandemic, any help the economy and businesses can get is definitely a positive

Who Qualifies for IRS Section 179?

Basically, any business that purchases approved equipment for its day-to-day operations can qualify for this tax credit. There are no restrictions on the type of company that can receive the credit and their size is also irrelevant. There are however certain spending and deduction limits. They are as follows:

  • $1,050,000 deduction limit for 2021
  • $2,620,000 spending limit for 2021

Besides the spending and deduction limits, the equipment you’re purchasing has to fall into one of the following categories:

  • Hardware (robots, machinery, computers)
  • Furniture
  • Off the shelf software
  • Vehicles intended for commercial use (shuttle vans, trailers, cargo trucks, etc.)
  • Property that does not affect the building’s integrity
  • Certain renovations (roofing, alarms, fire systems, etc.)
  • Any property that is not intended for personal ownership

Another requirement is that the vehicle or equipment being purchased has to be put to use before midnight of December 31st, 2021 for the tax deductions to take effect.

What Commercial Vehicles Can Be Purchased Under Section 179

To keep it as simple as possible, every vehicle can be written off 100% through IRS Section 179 tax deductions if it falls into one or more of the following categories:

  • The vehicle has more than nine passenger seats that can be used.
  • The vehicle has no seating behind the driver. An example of this would be a cargo van or a moving truck.
  • The vehicle is used for heavy construction work. An example of this would be a forklift or concrete transport truck.
  • The vehicle is an over-the-road semi. This includes “big rigs” truck and trailers.
  • The vehicle is intended to be used as an ambulance.
  • The vehicle is intended to be used as a hearse.
  • The vehicle is intended to be used as a shuttle.
  • The vehicle is a modified version of a van.

If the type of commercial vehicle you’re eyeing passes this test, then you can effectively take advantage of the full depreciation deduction for 2021. If it doesn’t then you can still get it but you won’t get a full deduction on the money you spend so it may not be the best financial decision for you and your business. This varies on a case-by-case basis so it depends though.

Consult a tax professional to be sure you qualify for any tax write-offs. This article is not intended to be professional tax advice.

Used Commercial Vehicles Under IRS Section 179

Another question that comes up quite often is based on used commercial and vocational vehicles. Is it possible to buy them and still take advantage of the Section 179 tax deductions?

Yes, it is! The IRS defines their requirement as “new to you”. What this means is that as long as you haven’t purchased the commercial vehicle before and are not related to the seller, the deductions will still apply.

There are some caveats which we will elaborate on in the next section, but for the most part, buying used commercial vehicles shouldn’t be a problem at all.

Rules You Must Follow

Here are some things you need to keep in mind when buying vehicles and wanting to benefit from the IRS Section 179 tax deductions:

  • The vehicle should be used for qualified business usage at least 50% of the time. Commuting to and from work is NOT business usage.
  • The vehicle should be registered in the name of the business.
  • Full deductions may only be possible for vehicles that fulfill the requirements we’ve outlined in the previous sections.
  • The vehicle must be purchased and put to use by December 31st, 2021.
  • There are certain spending caps on vehicle types. SUVs, for example, have a limit of about $26,200 for the year 2021. “Heavy” SUVs have a more relaxed limit owing to the cost of acquisition. To qualify as “heavy”, it has to have a Gross Vehicle Weight Rating (GVWR) of more than 6000 pounds.
  • The amount of tax deductions you can make depends entirely on the amount you use the vehicle for EXCLUSIVE business purposes. Some vehicles by design will ONLY be used for work like forklifts and ambulances, but others live SUVs are more difficult to categorize. Technically, it’s a transport vehicle but getting 100% tax deductions may only be possible if you can confidently defend using it for your work only.

Keep all these things in mind when you decide which commercial vehicle to get for your business. The tax deductions have made the process easier than ever and with a plethora of financing options at your disposal, buying the vehicle in question is even simpler!

Using private financing companies like Dimension Funding to purchase your equipment or commercial vehicles allows you to take advantage of the IRS Section 179 deduction while also giving you the benefit of consistent monthly payments and an easy application process among others.

With a quick approval process and all your expenses taken into account, Dimension Funding offers a time-tested, hassle-free approach to securing your next vehicle upgrade. Apply online now to get started on your application.

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Current State of Equipment & Software Industry After COVID 19

Software & Equipment Financing
Software & Equipment Financing

Current State of Equipment & Software Industry After COVID 19

To say that COVID-19 adversely affected the worldwide economy would be a gross understatement. The worldwide pandemic that started in the beginning of 2020 is still going strong and while the situation in many parts of the world is consistently getting better, we’re not out of the woods just yet.

Thankfully though, the US economy is recovering and as vaccination becomes more common, there seems to be hope for the future. In this article, we’ll analyze the effects of COVID 19 on equipment and software companies, the current state of the economy, and industry as a whole, and we’ll try to predict what the future holds. For 2021 and beyond.

Side Effects to Business Operations

Operating a business during a virus outbreak is a big problem for a number of reasons. For one thing, close contact between your employees has to be minimized while also ensuring that the work you’re doing continues at a respectable pace. Another obvious setback is the overall demand and supply of your product or service.

Uncertainty and fear kill demand faster than anything and unless your work fell into the essential category of things that would be used every day regardless, your business numbers undoubtedly suffered. This is especially true for the equipment and software purchasing industry.

The main customers of these services and products are usually construction companies, and medium-sized to large corporations looking to make upgrades. Almost all construction efforts ceased after the outbreak and many planned business upgrades were put on hold due to the extraordinary circumstances. In 2020, almost 67% of US construction firms reported cancellations or delays in planned projects.

The construction industry had to suffer from many layoffs as well and contributed a total of 10.1% to the overall unemployment rate in the country. Another issue for equipment purchasers and suppliers was the fact that many of their assets were shipped from China and Korea. Due to the travel and shipping restrictions, delays and canceled deliveries were a normal occurrence.

All these factors meant that the equipment purchasers in the market lost some of their biggest customers practically overnight; a hit the industry is still recovering from.

The Current State of Economic Activity

Now that 2020 is behind us and we are well into 2021, many people are looking towards the future with hope and a newly invigorated sense of cautious optimism. Several variants of a COVID 19 vaccine have passed clinical trials and are now being distributed all over the world. In the US, vaccinations are being carried out consistently with close to 63% of adults having received at least one shot. While the US hasn’t reached “herd immunity”, the situation has improved with the lowest new Covid cases in over a year.

From an economic standpoint, things are also beginning to improve. First quarter 2021 had an increase in real GDP of 6.4 percent. Many construction projects that had been sidelined are now starting up again and companies are starting to rehire and upgrade their capital to accommodate these new changes.

Obviously, as the construction industry starts picking up steam, so do their suppliers and equipment purchasers. Companies operating in this sector should expect their order volumes to increase steadily as the year progresses. Shipping should also be much easier now as many of the trade restrictions caused by the virus have been relaxed especially for heavy imports.

All this is good news for the economy and industry as a whole and although the situation of our worldwide health is far from resolved, it’s a step in the right direction and should usher in a wave of much-needed progress for many countries.

Predictions for the Future

Predicting the future is very difficult in the best of circumstances, which makes it almost impossible to do amidst a global pandemic. While the vaccinations are rapidly underway, it will be many years before every person in the world is safely vaccinated and protected. Another thing to note is the variability of success stories in our current times.

A serious problem down the line might be the different permutations of the virus originating in different parts of the world such as the one in the UK. This strain is said to be much more contagious and harmful than the current one we’re fighting which is alarming, to say the least. However, according to a World Health Organization official, the Covid-19 vaccines authorized for use in the US and Europe offer protection against the main variants known to exist.

All these factors make predicting the future difficult. The rapid nature of change might clear things up quicker than we anticipate, or it might worsen them considerably. As cautious optimists, we think humanity will keep fighting this battle and we and our economies will adapt to accommodate the changes necessary to do so. It might be wishful thinking but if things keep progressing the way they are now, then our industries might recover sooner than we think.

We hope this article helped give some clarity to the current situation of the worldwide pandemic and what it means for the equipment and software purchasing industry.

If you’re interested in getting financing for your customers through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time-tested, hassle-free, and convenient financing option.

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A Small Business Owner’s Guide to Obtaining Equipment Financing in 2021

Equipment Financing
Equipment Financing

A Small Business Owner’s Guide to Obtaining Equipment Financing in 2021

It’s no secret that upgrading the tools you use on a daily basis is key to long-term success and growth as a business operating in the twenty-first century. The benefits are undeniable and strategically upgrading your equipment can help lower your costs, produce higher quality products, and can help you develop a loyal customer base.

This is easier said than done though and among the problems of upgrading existing equipment, the biggest one seems to be the associated cost. Because of the high demand and incredible engineering required, most machines are very expensive and require a significant amount of capital to either purchase or maintain regularly.

But thankfully, just like our machines, our financing options have also progressed to make the process much simpler and accessible to almost everyone. In this article, we’ll walk you through the benefits of upgrading your equipment (if you’re on the fence), the options available to you, and why private financing is probably your best bet.

Benefits of Upgrading Your Equipment

Before jumping into financing your next upgrade, it’s important for you to rationalize the potential gains of said upgrade. If the improvement in your tools is not going to carry over to a marked increase in your profitability, then it’s an unnecessary expense you should probably avoid.

There are, however, some fantastic benefits to be had through upgrading your equipment and we’ll dive a little deeper into them down below:

  • Productivity. Perhaps the biggest reason you should consider an equipment upgrade is because of the increase in production capacity you will likely see. Machines can work longer and faster than humans. They don’t need breaks, and as long as you’re keeping them well maintained, don’t need to be motivated to work harder. As a result, you can increase the volume of your operation which will, in turn, help you reach economies of scale much quicker.
  • Fewer Accidents. Another huge benefit of utilizing machines in your workflow is the decrease in hazard probability. Newer machines are equipped with advanced features that help them perform their functions while keeping safety standards in check. A good example of this are lasers that stop the machine instantly if something passes through them.
  • Better Consistency. Besides producing more volume, better equipment can help you greatly streamline your quality control. Machines very rarely make mistakes and can recreate something thousands of times over without missing a beat. They’re also good for catching mistakes in production that might escape the human eye or understanding.

Your Options (Banks vs Private Financing)

Now that you’ve understood the benefits of potentially upgrading your equipment, let’s get into the two most popular financing options available to you: bank loans and private financing through a third-party vendor.

Bank loans are an incredibly popular financing option and chances are you’ve probably thought about going down this route at least once. Banks can be helpful in obtaining capital when the amount you require is monetarily very heavy. Banks are also a good option if you have a good relationship with them and have been in business for many years. This can help you get more favorable terms of lending that might not be possible otherwise.

The biggest hurdle for this option is dealing with the bank itself funnily enough. Banks are unwilling to invest in very small businesses with little to no credit history so if your operation is just getting off the ground, the chances of getting approved for a loan are next to zero. Besides having a good credit history and reputation, banks also require your assets as security, in case you’re unable to pay them back down the line. This can cause problems in the future for your business, as many examples have proven in the past.

Another thing that should be mentioned is fluctuating interest rates. The amount you have to pay the bank every month will vary according to the interest rate at that particular point in time. This creates uncertainty and can cause problems in your planning as the exact amount you have to pay may change significantly on a monthly basis.

The other option at your disposal is private financing. This increasingly popular option has many benefits for small businesses in particular. In a nutshell, private financing companies like Dimension Funding purchase the equipment you need for you and you pay them back over a fixed term.

Let’s look into some of the benefits private financing provides compared to bank loans in a little more detail in the next section.

Why Private Financing Could Be the Best Option

  • Fixed Monthly Payments. As we’ve already mentioned previously, banks operate according to interest rates and as a result, the amount you have to pay every month can vary quite significantly. Private financing on the other hand has fixed payments that you decide during your term settlement. This amount never changes and never fluctuates. This creates consistency and helps you plan your quarterly finances more efficiently as you know exactly what you have to pay.
  • Lock in Low Rates. Rates are currently very low right now. However with the potential for inflation, rates are likely to rise soon. Through private financing you can lock in low rates now and pay with tomorrow’s dollars.
  • Finance Up to $250k with No Financing Statements. “Application only” options allow you to get financing for equipment valued at up to $250k incredibly quickly as no documentation is required from you. Just an application. If you require equipment that is more expensive than $250k then you just have to provide your financial statements which will be processed much faster than bank loan procedures. Some of these procedures can take anywhere from a couple of weeks to a couple of months; time that you could have spent working and optimizing your business.
  • Finance 100% of the Costs. One thing that banks don’t disclose openly is the fact that they’re only paying for the equipment itself. There are many hidden charges like delivery, setup costs, maintenance, training, and you are expected to fulfill all of those yourself. Private financing companies, on the other hand, allow you to finance everything we’ve mentioned and more in your principal amount. This means that you get an all-inclusive option that covers everything you need to get up and running.
  • Fast Online Application Process. Instead of the tedious documentation and prolonged waiting periods that banks subjugate their customers to, private financing allows you to get what you need quicker and easier through a robust online application process. Just fill out the form and you can get approved in as little as a couple of hours.

Another thing that bears mentioning is that private financing companies like Dimension Funding can help you acquire almost any form of equipment you can think of. Commercial, construction, IT, software, material handling, and medical.

If you’re interested in financing your equipment through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time-tested, hassle-free, and convenient financing option for your next equipment upgrade.

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How Private Financing Is Revolutionizing Equipment & Software Purchasing

Equipment & Software Financing
Equipment & Software Financing

How Private Financing Is Revolutionizing Equipment & Software Purchasing

As we enter the second decade of the twenty-first century, our technology and machinery have progressed with an unprecedented degree of innovation. The capabilities and possibilities enabled by these innovations are quite literally endless. Almost all major businesses in the world utilize technology in one way or another and the demand for specialized equipment like robots and software is at an all-time high.

While the presence of this demand and interest is a good thing, the cost of admission continues to be a problem for both equipment purchasing partners and companies alike. There are workarounds to the problem, mainly bank loans and leasing, that lessen the burden but it’s not necessarily the best solution. But thankfully, there is another option that many purchasers are taking advantage of that you might not have considered.

In this article, we’ll tell you why privately financing your next equipment or software purchase through a third-party vendor could be the best overall choice for you and your business.

The Costs of Equipment Purchasing

You’ve probably understood already that equipment and software aren’t cheap. Especially the more specialized examples. This varies according to the equipment type and function of course but for the most part, it’s a serious financial decision to make. And also, a potentially beneficial one. The benefits of upgrading your equipment or using new production processes are huge and would require an entirely separate article to go in-depth into. The short version of all the benefits you gain access to include:

  • More productive capacity
  • Better pricing structures
  • Improved worker safety
  • More consistent work output
  • Higher quality work output
  • Potential to reach more customers
  • Ability to expand operations in more than one location

 

Bank Financing of Equipment & Software

Now let’s move onto financing your purchase through a bank. We’ll assume that you’re buying instead of renting the equipment or software in question. Renting isn’t a bad option by any means but as the instances of its usefulness are niche in nature, we’ll stick to the more orthodox approach of buying equipment outright.

Bank loans are the conventionally popular choice and there are certainly advantages to this approach. For one thing, banks can loan a very large amount of money if required. For another, if you already have a good relationship with your bank and have been in business for a considerable amount of time, then acquiring the loan will be much easier.

Bank loans have problems that many people don’t think about before making this important decision, however. Here are some of them in a little more detail:

  • Getting the Loan Itself. As we’ve already mentioned, getting a loan as an established business is easy but getting one as a new startup is almost impossible. Banks will very rarely trust newcomers with a huge amount of capital without a proven track record and it’s a classic catch 22. This is a big reason why bank loans are an inefficient choice for small business owners.
  • Assets Taken As Security. Another procedure in the loan approval process is agreeing to let the bank use assets of yours as security. The bank does this to ensure it doesn’t suffer a loss in case you don’t end up paying it back. Whatever the reason, it lessens your standing and negatively affects your company’s equity.
  • Only Equipment Is Financed. One thing buyers tend to forget is that there are many hidden costs associated with buying a piece of equipment or software. Delivery, setup, maintenance, training, troubleshooting, etc. All these processes come at a price and the bank will not assist you in handling them.
  • Uncertain Monthly Payments. Banks operate based on interest rates which fluctuate and change with the economic health of the country. Because of this, monthly payments are very rarely steady and can vary on a month-to-month basis. This makes financial planning a challenge and can hinder your yearly budgeting and profit forecasting.
  • Long Application Process. This might seem like a nitpick, but it’s an inconvenience, to say the least. Banks have very long application procedures and the waiting periods between appointments and approvals can either be a couple of weeks or a couple of months. Besides being a waste of your valuable time, it’s not a good option for people looking for a quick solution to a problem. So, unless you’re prepared to wait a while for your equipment purchase, bank loans might not be your best bet.

The Private Vendor Financing Solution

On the opposite end of the spectrum, private financing offers a much easier and more efficient purchasing opportunity for both small and large businesses alike. Companies like Dimension Funding are leading the charge in providing an easy, safe, and economically viable option for vendors and private customers alike.

The main advantages of private financing include:

  • Fixed Monthly Payments. Unlike banks that put you at the mercy of fluctuating interest rates, private financing lets you choose a low monthly payment for up to 60 months. This helps you plan out your finances better and keeps surprises at bay. You know exactly how much you’re paying each and every month. This amount is agreed upon during the sign-up process.
  • Up to $250k Without Financial Documents. You can finance equipment worth up to $250k through an “application only” option. This is in stark contrast to banks that have lengthy application processes as well as hefty documentation requirements. If the equipment you’re looking to finance is more than $250k then you just have to provide your financial statements.
  • Finance 100% of the Costs. As we’ve already mentioned, banks only finance the equipment itself. On the other hand, private financing companies like Dimension Funding finance everything for you. This includes all associated costs like maintenance, delivery, setup, etc. You don’t have to worry about unexpected expenses arising as everything is taken care of and included in your principal.

Because of these reasons, private financing has helped thousands of businesses and individuals finance their equipment and software upgrades quickly and easily. We hope this article helped explain the reasons behind this rise in popularity and gave you ideas for your own business and workflow.

If you’re interested in financing your equipment or software purchase through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time-tested, hassle-free, and convenient financing option for your next equipment upgrade.

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3 Strategic Ways to Acquire Material Handling Equipment on a Budget

Materials Handling Equipment Financing
Materials Handling Equipment Financing

3 Strategic Ways to Acquire Material Handling Equipment on a Budget

As the rate of economic expansion has increased so has the demand for specialized construction equipment. Much of 2020 bought a fast upward trajectory to a standstill but the tide is turning quickly. With vaccines being formulated to combat COVID 19, economic upturn is just around the corner.

Construction equipment contractors or vendors will be operating at full capacity very soon because of this. The acquisition of material handling equipment will certainly be a top priority especially if your fleet is underdeveloped. But the staggeringly high upfront costs make this a tough decision.

Thankfully, there are many ways you can stretch your budget when it comes to acquiring new equipment.

And in this article, we’ll show you how to do just that. We’ll run through the types of material handling equipment you might require, we’ll go over the options at your disposal, and will tell you why private financing could be your best bet.

The Types of Material Handling Equipment at Your Disposal

Material handling basically refers to the loading, unloading, and movement of goods within a factory or warehouse with the aid of mechanical devices. There are many iterations of machines that carry out such processes. Their classifications and examples include:

Storage and Handling Equipment

  • Shelves
  • Racks
  • Bins
  • Drawers
  • Stacking frames
  • Cantilever racks
  • Mezzanines

Bulk Material Handling Equipment

  • Stackers and reclaimers
  • Hoppers
  • Grain elevators
  • Bucket elevators
  • Conveyor belts
  • Dump trucks
  • Screw conveyors
  • Rotary car dumper

Industrial Trucks

  • Hand trucks
  • Side loaders
  • Pallet trucks
  • Walkie stackers
  • Order pickers
  • Platform trucks
  • Forklifts

Engineered Systems

  • AGVs
  • Conveyor belts
  • Robot delivery systems
  • Automated Storage and Retrieval System (AS/RS)

Your options to acquire Materials Handling Equipment (Rent vs Buy or Lease)

Once you’ve decided on the equipment you want to invest in, your next choice is determining whether you want to rent or buy said equipment. This choice will be heavily influenced by your individual circumstances and the lifecycle of your operations.

When You Should Rent Materials Handling Equipment

Renting is a great short-term option. It allows you to get the tools you need quicker and cheaper when compared to buying outright. The amount of time you can actually use the equipment varies on your project and the agreement itself. These are usually quite flexible so finding agreeable terms shouldn’t really be a problem.

This is especially good if you just need a machine for a certain project. If your project requires a small machine you can rent just that for the required time instead of investing significant money. Niche use cases like these benefit the most from renting opportunities.

Another good thing about renting is the fact that you don’t have to deal with the maintenance of the machine. This not only saves time but also lets you save on service costs which can add up over time.

When You Should Buy or Lease Materials Handling Equipment

If you intend on using the material handling equipment for a long time, then buying is for sure the way to go. It ends up being more cost-effective in the long run when you factor in the frequency of usage and the costs of renting. If you have the funds, then investing in certain workhorse equipment pieces that have a wide range of functions is definitely wise.

Besides the cost savings compared to renting, buying is also the more convenient option. You can use the equipment bought whenever you require it and you don’t have to rely on the handler’s schedule or priorities. You can also save time by avoiding having to rent every time you take on a new project as the process can be tedious.

You also have the advantage of getting the exact equipment you need, and you gain the ability to customize it to your liking. You can even change the color to be more suited to your company; something you can’t do with rented machines. And with so many options to buy used or refurbished equipment, buying outright might not even be that costly to begin with.

Leasing equipment can be another way of purchasing equipment. A finance agreement and lease agreement look very similar and both result in you owning the equipment. In the case of a lease agreement, at the end of the term you buy out the lease, usually for a nominal sum such as $1. There are tax advantages to leasing or buying because you can write off the payments on your taxes. (See your tax advisor for more information or guidance on tax matters.)

Why Private Financing Is the Way to Go

Getting a bank loan is an option but we believe privately financing your materials handling equipment through companies like Dimension Funding is your best choice. Here are some reasons why:

  • Fixed monthly payments. Unlike banks that put you at the mercy of fluctuating interest rates, private financing lets you choose a low monthly payment for up to 60 months. This keeps unpleasant surprises at a minimum and allows you to plan your finances better and more efficiently as you know exactly what you’re getting into.
  • Up to $250k without financial documents. You can finance equipment worth over $250k through an “application only” option. You can get exactly what you’re looking for super quick because of this and if the equipment you need is higher than $250k you just have to provide your financial statements.
  • Finance 100% of the costs. Banks only finance the equipment itself. When it comes to the maintenance costs, delivery, and setup, you’re on your own. Private financing, on the other hand, includes all these costs into your application. You get an all-inclusive option that covers everything including the equipment.
  • Unsecured. Banks usually require all of your company’s assets as collateral for a loan. Private financing companies only use the asset being financed as the collateral.

Budget constraints shouldn’t be a limiting factor in your expansion. Knowing your options and making smart decisions on how and when to finance your upgrades is all it really takes. Keep your business goals at the forefront of all your decision making and you’ll be on the right track!

If you’re interested in financing your material handling equipment through a third-party vendor, be sure to contact Dimension Funding. You’re only an online application and a quick approval process away from getting a time tested, hassle-free, and convenient financing option for your next equipment upgrade.

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Vendor Financing Programs: Why There’s No Better Time Than Now

Vendor Partner Program is your Road to Success
Vendor Partner Program is your Road to Success

Vendor Financing Programs: Why There’s No Better Time Than Now

Vendor financing is an important marketing and sales tool available to equipment manufacturers, dealers, and distributors. Even when the economy was doing well, a significant number of equipment buyers were opting for purchases financed by the equipment vendor.

Now that the economy has been in an economic slowdown and cash liquidity is a major area of concern for most companies, equipment & software financing is in greater demand. This is especially true for small and medium-sized organizations that need the equipment or software now, but don’t have enough in cash reserves to fund the entire purchase upfront.

From a vendor’s perspective, the ability to finance a purchase is an important one, especially if their competitors can and they can’t.

Why?

Because businesses that are unable to make a purchase outright would have no choice but to go elsewhere to a vendor who can work with their current financial situation.

The issue is that for many small or medium-sized vendors, they simply don’t have the financial resources to compete with large manufacturers/vendors with captive financing capabilities and successful vendor financing programs of their own.

Vendor Financing Programs Are a Win-Win

For equipment buyers, a vendor financing program gives them the flexibility to make installment payments (typically on a monthly basis), so they don’t deplete their working capital. Often times, there’s also the option of leasing, if need be, against an outright purchase of the equipment.

For the vendor, equipment financing enables a long-term relationship building exercise with the customer, leading to an increase in customer loyalty, repeat purchases, cross-selling, and technology enhancements as and when required. This translates into more business and additional revenue.

Selecting the Right Vendor Finance Partner

While the need for vendor financing can’t be underestimated, the real challenge for many vendors lies in their ability to set up an equipment or software financing program on their own. Most small and medium-sized vendors simply don’t have the requisite finance – or infrastructure – to manage and run a financing program on their own. They also lack the knowledge and experience. As such, finding a suitable finance partner is paramount to success.

A good finance partner will have access to capital, as well as the requisite expertise to successfully manage an equipment and software financing program. In addition, the selected partner should have a proven track record of vendor financing in the specific industry in which the vendor is operating, as industry-specific knowledge and experience is critical to the successful implementation of such vendor financing programs. The financing partner should also have a large capital base to be able to provide long-term solutions and stability to relationships both with the vendors and their end customers.

Once a vendor has selected a financing partner, the end-goal should be to build a long-term and sustainable relationship with a single financing partner instead of exploring multiple different options.

Get Assistance with Setting Up a Vendor Finance Program

To have a more detailed discussion on this subject and understand all the benefits of setting up a vendor financing program for your customers, contact us today at 800-755-0585.

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Take Advantage of IRS Section 179 Before the End of 2020

Reduce your 2020 taxes
Reduce your 2020 taxes

Take Advantage of IRS Section 179 Before the End of 2020

As 2020 draws to a close, businesses all over the world are taking the time to reflect on the turbulent year, are making any last-minute changes to their plans, and are deciding the basis of the coming year’s procedures.

One thing you should start considering if you haven’t before this point is taking advantage of the IRS Section 179 tax deductions. This law gives you an incredibly affordable opportunity to finance your equipment upgrades or any other renovations you may have been planning.

The deadline to benefit from this is fast approaching though and the sooner you understand Section 179, the sooner you can make the best possible long-term decision for your business.

IRS Section 179 Explained

In a nutshell, Section 179 of the IRS tax code is an incentive formulated by the US Government that is specifically designed to encourage small businesses to increase their spending. This spending could be in the form of upgrading existing equipment as an example or implementing a new industrial workflow through updated machinery.

Section 179 does this by deducting the full purchase price of qualifying equipment or software bought during the tax year. This would allow companies to deduct the full price from their gross income as this expense would be considered a tax write off.

Specifics You Need to Know

To take advantage of this, the equipment you’re looking to purchase has to be eligible, and said equipment has to be bought and put to use BEFORE midnight on December 31st, 2020. There are also spending caps in place, mainly a:

  • $1,040,000 deduction limit
  • $2,590,000 spending cap.

The equipment you’re financing has to fall in one of the following categories to be eligible for Section 179:

Eligible for Section 179

  • Hardware (machinery, robots, computers, etc.)
  • Furniture
  • Vehicles designed for commercial usage (shuttle vans, cargo vans, trailers, etc.)
  • Off the shelf software
  • Property that is not a part of the building’s structure
  • Certain non-residential building renovations (roofing, alarms, fire systems, etc.)

Unfortunately, you cannot at this point in time take advantage of Section 179 tax deductions if your planned equipment upgrade falls into the following categories:

Ineligible

  • Property (permanent buildings, structures, swimming pools, parking areas, etc.)
  • Property being used or upgraded outside the US
  • Property used for the purpose of furnishing lodging
  • Property inherited or taken as a gift
  • Any property that does not fall into the category of personal property

The Benefits for Your Business

As Section 179 was passed in the hopes of bolstering general economic activity, it’s no surprise that many businesses will find the law quite helpful. A problem that plagues companies, especially the ones that operate at a smaller scale, is finding the resources to upgrade or automate their production processes and software.

These upgrades are very rarely affordable which is why many businesses have to continue to use older, unreliable equipment to carry out their production in the hopes of keeping their overall spending and costs down. This law changes all this. The IRS Section 179 tax deductions help alleviate a lot of the burden business owners face when making these tough decisions. Potential upgrades that may have been in the pipeline for years, can finally become a reality.

Better equipment will allow businesses to produce more products at a better quality and a lower price. It might also allow them to try newer, more innovative production methods to give their consumers an incredible product that helps their bottom-line and develops brand loyalty. All these factors play a big part in achieving economies of scale; a goal most businesses are actively striving towards achieving.

Next Steps

Now that you know all about the IRS Section 179 tax deductions, it’s time to understand the next steps on what you have to do.

The most important thing is making sure your upgrade is eligible and then acknowledging the December 31st deadline we’ve outlined before. As the month is almost drawing to a close, time is short and you will have to act fast if you’re still interested in your business benefiting from this law for 2020.

To claim the Section 179 deduction, you have to specify this on Part 1 of Form 4562. Include a description of the property, its cost, and the overall amount of Section 179 you’re claiming on this asset on Line 6. A list might also be attached in case you need more room.

If you’re unwilling or unqualified to fill this out, then it’s probably a good idea to hire an accountant to do this for you.

In terms of gathering funds, you can choose any financing option for your equipment upgrades and the Section 179 deduction would comply with almost all of them. This includes private financing companies like Dimension Funding. Choosing to finance your industrial automation upgrade through private financing companies like Dimension Funding has a myriad of benefits that banks and other lenders simply can’t provide.

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4 Tips to Get Your Business Ready for Year-End

Get your business ready for 2021
Get your business ready for 2021

4 Tips to Get Your Business Ready for Year-End

Business owners must be extra vigilant as the year ends for one simple reason: Being smart and planning carefully at this time can give you a huge head start on your competition and could make the difference between you succeeding in the new year or failing.

1. Plan for the Next Year

Prior Planning Prevents Poor Performance. The military swears by this idea and there’s no reason that businesses shouldn’t internalize this concept too. The better you plan, the lesser the chances of your strategies failing or not yielding positive results.

A great way to start this planning process is to look at the current year and analyze if the goals you set at the start of it have been met or not. If not, then why? Investigate and try to find cues on what you should have done better. The more you research and dig, the better you’ll understand your failures and successes.

Customer testimonials, financial reports, employee feedback, are all ways that can help you better discern your business operations and the next steps you need to take to improve on them. It’s important to be very honest and proactive here. Making a wrong call or miscalculating a strategic step could result in a catastrophically bad new year for you.

Use all this information to get your business organized and create new goals for the next year while updating and modifying existing ones.

2. Sort Out Your Accounts and Finances

While easily the least glamorous part of owning a business, finances are the lifeblood of your day-to-day operations. The end of the year is a great time to sort of the essential tasks every business owner has on their to do list. Whether you do these yourself or delegate to an accounting professional, it’s super important that you make certain statements a priority to better understand your business’s financial performance.

The following reports should be emphasized:

  • Profit and Loss Statement – P and L’s, also known as income statements, document your businesses’ revenues, expenses, and overall costs during a particular period of time; the end of year income statement would obviously consist of that entire year’s finances.
  • Cash Flow Statement – This useful analysis tool reveals how a business manages its funds. It includes information on how changes in the company’s assets and liabilities affect cash flow and cash equivalents.
  • Balance Sheet – An overview of a company’s assets and liabilities which includes any amounts owed to investors or lenders.

These reports must be the basis of most of your decision making and you should plan according to the positive or negative results they reveal.

3. File Your Taxes and Take Advantage of IRS Section 179

Just like sorting out your finances at the end of the year, taxes are another important, yet tedious task business owners have to do. No matter how annoying, filing taxes on time is important if you want to avoid late filing fees.

Besides just getting your tax documents in order, this is also a good time to finance your equipment upgrades by taking advantage of IRS Section 179 tax deduction. This law allows businesses the opportunity to deduct the cost of qualified equipment purchases during that tax year as a business expense.

Lower taxes lessen the burden of the upgrade allowing more businesses who might not be able to afford expensive equipment, the opportunity to update their processes. Some important things you should know about IRS Section 179:

  • There are spending caps ($1,04,000 deduction limit and a $2,590,000 spending limit), so it might not be a viable solution if your scale of production or operation is quite large. However, Bonus Depreciation is likely to take care of purchases over the Section 179 limits.
  • Only qualified equipment can take advantage of IRS Section 179. If your upgrades are related to renovating buildings or property, then you might not be able to take advantage of the tax deductions.
  • Your upgrade MUST be bought and put into action by midnight of December 31st, 2020.

The last point is particularly important as you have to act fast if you want tax free equipment upgrades for your business especially now that 2020 is drawing to a close.

4. Focus on Improving Employee Performance

Employees are the backbone of any good business and while analyzing your finances and tax impacts are important, your staff performance also requires some introspection. Talk to your staff and ask for their feedback on their grievances and the things they want to change or improve upon.

Likewise, take this time to give your own feedback to them on what they should do to improve their performance. This allows every team member to know exactly where they stand and what they need to work on in the coming year. A company that wants to constantly improve can never leave out their workforce as they are the ones who will be carrying your company name forward.

Keep everyone on the same page and you will avoid employment disputes and quarrels in the coming year. As a bonus, this is also a great time to plan some morale-boosting events like Christmas parties but due to the Coronavirus pandemic, this particular strategy should be postponed for 2021.

Conclusion

We hope these tips give you some ideas on what to implement or look into at the end of the 2020 business year. It’s not how you start but how you finish that impacts your longevity in this game, and with 2021 just around the corner, your business has a great chance of reaching the success you aspire towards.

 

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Top 5 Benefits of Financing your Industrial Automation Upgrade

Benefits of Financing Industrial Automation Upgrades
Benefits of Financing Industrial Automation Upgrades

Top 5 Benefits of Financing your Industrial Automation Upgrade

Industrial Automation is the future and incorporating it into your manufacturing workflow is an absolute necessity in today’s business climate. While the evolution of robots and specifically calibrated machinery has changed our production processes and methodologies for the better, it comes at a significant monetary cost.

The most difficult part of adopting and benefiting from industrial automation is getting hold of the machinery itself. There are a myriad of financing options available for you to choose from and an even wider range of vendors offering their services. Trying to make the best decision for your company and your finances can become difficult for this very reason.

You can go to a bank and ask them to finance your upgrades, but your credit score and history will play a huge role in this acquisition. Smaller businesses in particular might find banks reluctant to invest in this steep upfront cost for them, which is where private financing companies like Dimension Funding come in.

Most of the time, in situations like this, financing your industrial automation upgrades will be your best bet – regardless of the size of your business or the equipment you’re looking to have installed. 

Here are 4 reasons why. 

1. Only Purchased Industrial Automation Equipment Is Used as Collateral

A problem with financing through bank loans is that the bank lending the money will require a “blanket UCC lien.” This allows the bank to take all the assets of your company as a security for the financed equipment. It grants them the legal right to seize these assets in the event of nonpayment. Banks do this as an extra peace of mind to ensure you pay up, but it lessens your position and is undeniably a big liability.

Private financing companies on the other hand do not require a “blanket lien.” In fact, many only require the equipment being financed to be used as a security instead of everything you own. This keeps you in control and minimizes huge losses in case of non-payment.

2. All Industrial Automation Upgrade Expenses Are Taken into Account

Another problem with financing your industrial automation upgrade through banks is the fact that they don’t cover soft costs like installing the equipment, transporting the equipment, and maintaining it in the long run. These are all expenses that you are expected to pay on your own and can come as an unpleasant surprise after already agreeing to pay a large sum of money for the equipment itself.

If you finance your upgrades privately, however, all these expenses are accounted for and included in your principal amount. This minimizes any sudden or unexpected costs and gives you the full picture of what you’re actually paying for. Better awareness of what you pay allows you to plan better and allocate those funds for more important things in your business.

3. Fixed Monthly Payments

Private financing companies like Dimension Funding offer yet another advantage when compared to conventional bank loans. Banks usually prefer to loan money on a floating or a variable rate of interest which results in irregular monthly payments. Besides the inconvenience of having to constantly stay updated with these payments, it makes it more difficult to plan and allocate financial resources efficiently.

Privately financing your company’s industrial automation through a third-party company means that you will pay a fixed monthly payment for the entire duration of the automation equipment’s decided term. There are no unpleasant changes in interest rates and no hindrances in planning for where to invest more resources in the future. This allows you to treat your payments like a consistent monthly cost. One that is easy to account and plan for.

4. Easy Application and Approval Process

The process of applying for and getting approved for private financing is more streamlined than it has ever been.

You can apply for up to $250k without providing financial statements (some restrictions apply) and if you require a larger package, a hassle-free paperwork process makes that easy too. The application is online and after you apply, the approval process can take as little as a few short hours. It’s that easy! Compare this with the mountain of paperwork required for bank loans and the associated uncertainty and lack of transparency. Private financing is a clear winner.

Next Steps

Financial decisions like deciding to incorporate industrial automation into your production flow have the potential of either taking your business to the next level or crippling your work and efforts. Making the most beneficial choice of how and where to receive this financing is a multi-faceted problem that requires you to look at your individual needs, your budgets, and what you value as a company.

If you’re interested in learning more about financing your company’s equipment through a third-party vendor for all the reasons we’ve outlined and more, be sure to contact Dimension Funding to get a head start on your approval process.

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