You’d be surprised, but people ask me this type of question all the time. Usually when they ask about a good time to lease equipment or similar, they are usually referring to economic indicators, time of year, Section 179 limits, interest rates, and so on.
There are a lot of answers to the question, but now that Section 179 is sitting pretty at $500k for the foreseeable future, my answer is very simple: in general terms, the time to finance equipment is when you need equipment.
It really is that simple for me. Looking at it through my somewhat pragmatic / logical self, if your company needs new equipment to do business, and having this new equipment will make you a better company and more profitable, then what are you waiting for? When you finance equipment, you spread out the payments, so it’s certain that your payment term will touch on times of both great economic news, and not-so-great news – that’s the economic cycle. Up and down, up and down.
I said earlier “in general terms”, because there are certain times that maybe listening to your accountant may make sense. For example, if a machine breaks on June 27th, and your accountant says “it would be better to wait until the next quarter begins”, then listen. Although if your machine breaks on December 28th, your accountant may also say “wow, what great timing – buy it right now and take the Section 179 deduction right away”.
But either way, there is no point in waiting for some mythical “perfect” time to buy something you actually need. The time to buy is when you require it – and equipment financing makes that very simple indeed!
Fletch Predicts Update: Congratulations Cleveland. Fletch nailed the Cavs!! Now all we need is the Cubs winning the World Series, and my “two long-suffering fan bases celebrate in 2016” prediction comes true!