Soft Cost Financing – Delivery, Setup, and Taxes

By | October 9, 2018

financing equipment and deliveryLet’s continue with my series of adding soft cost financing to any equipment financing or equipment leasing deal you engage in. This time we’ll talk about financing delivery and setup, and touch on taxes as well.  

Delivery is pretty straightforward. Most companies who sell equipment won’t pay for delivery. Some will send it via carrier (UPS or freight for larger items and machinery), and others might deliver it themselves for a fee. Either way, the customer typically pays for delivery, which can be a bummer if you have to pay it out of pocket.  

Setup is another story altogether, and could make a big difference in your purchase. Take, for example, complicated machinery, networked computer systems, point of sale systems, etc. – they typically need expert setup. Or even something simple like office furniture – replacing everyone’s desk and chair is a pretty big job. Plus, who removes the old stuff?

There’s also the complication of pricing. Many companies, in an effort to have a lower up-front price, will not include setup in the listed price, choosing to instead make it an option. I’ve seen this happen even on equipment that clearly needs expert setup and calibration, like advanced medical equipment and similar. The seller knows 9 out of 10 buyers require setup, but offering it as an add-on keeps the listed price lower.

This can be a problem if you work with a lender who does not finance soft costs. You think you’re financing everything, but then the added costs of delivery and setup come in. If your lender won’t finance the delivery and setup, you need to pay out of pocket, which sometimes make people wonder “well, why offer financing in the first place if you won’t finance it all?” Why indeed…

Let’s also discuss the ever-popular taxes. Tax is almost never included in any equipment finance deal, right? Well, they would be if you worked with a good equipment finance company – they’ll happily finance the tax as well.

If you work with a good equipment financing company, everything can be financed – delivery, maintenance agreements, taxes, training… you can finance all of the soft costs, and really hit the ground running. Your new equipment will be delivered, setup, your people will be trained on it, you’ll have a maintenance agreement, and you financed the tax as well. That’s a lot of “wins” for one financing deal. Oh, and you can probably take a Section 179 deduction too (you knew I couldn’t leave that out).

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