CSC-Blog-Tax_122018

Use Section 179 for Tax Deductions on Equipment Financing

No one really likes to talk about taxes, since they’re often considered a necessary evil, but your small or medium-size business may be missing out by not taking advantage of all the deductions available to it. One of the most advantageous is Section 179 — which allows businesses to write off the entire purchase price of qualifying equipment for the current tax year.

In the past, if your business bought qualifying equipment, it typically wrote off a little at a time through depreciation. Thus, if you spent $50,000 on a machine, you got to write off $10,000 a year for five years. While this was better than having no write-off at all, it pales in comparison to the value of getting to deduct the full purchase price of equipment from your gross income in the year it was acquired.

There are some limits to Section 179, of course, including caps to the total amount written off and limits to the total amount of equipment purchased — $1 million and $2.5 million, respectively, for 2018. The fact that the entire deduction goes away once $3.5 million in purchases is reached makes this a true small and medium-size business deduction.

A number of businesses that have received equipment financing from Clear Skies Capital (CSC) have taken advantage of Section 179 during tax time. For instance, a trucking company in Hawaii added three more trucks to its 12-truck fleet and created a win-win situation for itself — gaining the tax benefit/protection while investing in an asset that generates revenue.

Why Alternative Financing?

If your business is unable to overcome the challenges presented by traditional equipment financing, you might think you’re out of luck when it comes to Section 179 — but you’re not. CSC is in the business of supporting your success, even if your business is a poor candidate for a loan from a bank or other traditional source due to lack of consistent cash flow; insufficient collateral, credit, operating history, and management team; poor debt-to-income ratio; customer concentration; and economic concerns, among other things.

Equipment financing with CSC is beneficial for your business for a number of reasons, including:

  • We understand you may need to purchase equipment right away, so we offer 24-hour approvals, with funds delivered shortly thereafter.
  • Our application is just one page, so you can quickly and easily complete it — no drowning in paperwork.
  • Less than perfect credit. Having a less than stellar credit score doesn’t disqualify you. We require a 600 FICO score for equipment financing.
  • No collateral. For equipment financing, the equipment serves as the collateral.

Plus, you may be able to save quite a bit of money by using Section 179. To see how much, use this simple calculator: https://www.section179.org/section_179_calculator/ and certainly discuss things with a tax professional.

Why Choose CSC?

We want to see your business grow, and are ready to serve as your advocate to get you the equipment financing you need to remain competitive and/or take advantage of new opportunities. In addition to the reasons noted above, many clients work with us because:

  • We offer equipment financing from $5,000 to $1.5 million, with traditional monthly payments.
  • You need just 8+ months in business.
  • Your loan interest is tax deductible.
  • Our customer service is excellent.

The Takeaway

Unlike traditional lenders, we want to say “yes” to your need for equipment financing — so you can grow your business and benefit from Section 179 as outlined above. We’ve worked with businesses in a variety of industries, so we’re ready to lend our expertise to your decision-making process and work together toward your success. Discover how much you qualify for by scheduling a free consultation today >