It’s no secret that the American economy is still in a precarious state.  The global economic landscape is changing and nobody knows for certain how or when it will all shake out.  Tumultuous times like these can be tricky for business owners, but can also create opportunity for the business savvy. 

As new opportunities arise, cash or credit can provide the means to advantage of them.  Which of those to leverage, presents a dilemma for business owners.  How does one balance the necessities for growth with the essentiality of cash reserves?  In this economic climate, credit is vital yet often elusive.  Cash flow is the lifeblood of business more than ever — whether a small family enterprise or a huge multinational corporation.

 There are certain types of credit which are more readily available and, if done correctly, can actually add to the company coffers, verses drain it.  For instance, leasing equipment.

For businesses striving to move forward, one need that often becomes urgent, yet can be expensive, is additional equipment.  What is the best way to acquire new equipment without tying up precious working capital?

Equipment leasing and equipment lease back are  financial options that can help manage this delicate balance for businesses, whether they are struggling or growing.  Even for a company with large cash reserves,  equipment financing can make sense. Liquidity is available to fund other investments for future success – such as additional payroll or facility expansion.

 Another financial advantage to leasing equipment is the tax incentives which can rack up huge savings. Under Section 179, businesses that spend less than $2,000,000 a year on qualified equipment, can write off up to $500,000 in 2010 and 2011. The rules are designed for small companies, so the $500,000 deduction phases out when a business purchases more than $2,000,000 in one year. In addition, you may depreciate any excess as determined by the depreciation schedule for that asset. The Economic Stimulus Act of 2008 also created a bonus depreciation of 50%. That bonus depreciation has been extended with the recent passage of the Small Business Jobs Act of 2010. This bonus is in addition to regular first-year depreciation. The administration hopes that by helping businesses to swiftly recover the capital loss from new equipment expenditures, these businesses will have the funds to grow and provide jobs.

 In this precarious economy with credit still tight, one thing is certain: cash is king.  No matter what a company’s situation, it is a must to be aware of all financial tools out there that can help preserve liquidity and increase cash flow.

Lease financing can provide such benefits but, can also be expensive.  It is therefore advantageous to use a broker. A reputable, accredited broker has intimate knowledge of the marketplace and the lenders; knows where to go to get the kind of lease you need; and can generate competition among leasing companies, which drives down the cost.  If working with a broker, one thing to keep in mind — make sure to check references and BBB accreditation.