With the vast available facilities that entail high cost of maintenance and limited availability in the hospitality industry, hospitality equipment finance can be a good option. Because of the highly expensive and sophisticated features of hospitality equipment, a too tight budget can limit you to old, and out of the line facilities. Hence, here are the many benefits of picking commercial equipment finance over other finance options.
On and off balance sheets are the structures your equipment finance, particularly a lease, can take. Tax liability is reduced as the lessee is granted the right to claim the whole equipment lease payment as a business expense which is reduces his/her taxable income. For non-tax lease on the other hand, the lessee has then the right to claim tax benefit of ownership as well as the equipment’s depreciation treating the transaction similar to a purchase or loan for tax purposes. You are still highly recommended to consult with tax advisor as your lease depends on your accounting objectives and the hospitality equipment you are to lease.
100% Financial Subsidy
In hospitality equipment finance, sales or use tax, installation and training expenses, advanced payment interests, and delivery charges are all covered up for. Unlike in loans and other finance options that usually require an initial down payment, soft costs in this equipment finance are all funded- be it lodging, catering, transportation, or bedding equipment so long as you gain income from it. Additionally, other revenue-generating aspects of your business can be supported too-venue improvement, marketing activities, and research and development (recipe testing, product expansion etc.). Therefore, your cash flow is minimally affected and kept regulated- preserving your financial assets and stores. More so, your working capital and bank lines of credit are unaffected as well, keeping you from uncertainties of investments which may keep you from achieving your desired kick-back. Hence, this will allow you to overcome budget limitations and assurance of a good outcome.
Flexibility and Purchase Power
With the preservation of resources, you are given the opportunity to purchase modern equipment by venturing into hospitality equipment finance. This can keep you in the competition and patrons would appreciate your upgrades and improved facilities. Let them know that you are ready to adjust with change and trends when it comes to their comfort and accommodation. Your business is then saved from obsolete facilities and amenities which may lose the interest of your customers and discourage your loyal consumers from coming back. Additionally, you do not have to worry about disposal management and other ownership responsibilities.
Aside from the convenient and quick transactions that an equipment finance entail, your expense planning and cash forecast can also be improved. Your predetermined financial obligations and other payments lets you plan out and prepare your budget. This can save you from financial fluctuations present in other finance options because you are certain of the expenses that would be coming your way. You are then protected from inflations because of the spread out payments over a period of time that lets the core operations on the go.