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5 Reasons Why Material Handling Equipment Financing is a Smart Option

Automation, artificial intelligence (AI) and robotics are becoming increasingly important in the material handling industry.1 Is your business prepared to adapt to these and other important trends?

For most businesses, acquiring the equipment needed to remain competitive while maintaining working capital is a challenge. If you employ material handling assets in your business, you already know that not having enough equipment, the latest model machines or the most advanced technology can cost you. Efficiency may suffer. You may be unable to take on new business. Customers may be unhappy. Simply put, it can negatively affect your bottom line.

Improve productivity and profitability with equipment financing

Meeting customer and supply chain demands while preserving capital can seem overwhelming. However, many businesses are taking advantage of equipment financing options that make leveraging industry innovation affordable and more manageable.

According to a research study of businesses by the Equipment Leasing and Finance Association, 78% of respondents used at least one form of financing when acquiring equipment.Today, equipment financing companies such as CIT, offer funding solutions for all types of material handling equipment including:

Industrial trucks

  • Forklifts
  • Pallet jacks and trucks
  • Platform trucks
  • Order pickers
  • Sideloaders

Engineered systems

  • Automated Storage and Retrieval Systems (AS/RS)
  • Conveyor systems
  • Robotic delivery systems

Bulk material handling equipment

  • Conveyor belts
  • Bucket elevators
  • Grain elevators

Storage and handling equipment

  • Racks
  • Bins and drawers
  • Mezzanines
  • Stacking frames

Benefits of equipment financing

Here are five key benefits that explain how equipment financing can be a smart option for your material handling needs:

1. Conserve cash flow

Equipment financing is cost effective and can help reduce upfront expenses. It can improve your working capital position and free up cash that can be used for other areas of your business like expansion, improvements and marketing.

2. Avert risk

With operating leases, in which the lessor holds title to the financed asset, you can avoid the future risk of owning obsolete technology. Older assets can be costly to maintain, be less productive, making you less competitive.

3. Stay nimble

Technology changes at a rapid pace. With equipment financing you can quickly adopt the latest advancements to boost productivity and effectiveness.

4. Meet your equipment requirements

If you need to procure a large amount of material handling equipment or require higher-end equipment or technology, financing can help you achieve your goals. For example, with a Fair Market Value (FMV) operating lease, you typically pay a lower cost than if equipment is acquired using a loan structure or purchased outright. Financing companies assign a residual value that they expect to achieve when selling the used equipment at the end of lease. With an FMV lease, you are not paying for the full cost of the equipment, making it possible to pay less than a full ownership purchase. Or, some organizations use the affordability of an FMV lease to acquire a larger solution to better address their needs.

5. Potential tax and accounting benefits

Financing may provide tax and accounting benefits depending upon your company’s situation. Seek counsel from your tax and accounting resources to determine these benefits.

Learn more about how CIT’s equipment financing options can provide the funding you need to improve operations, build your business and stay competitive. Ready to get started? Ask your supplier about financing options. If your acquisition is less than $1 million, you can apply directly with CIT and receive a credit decision in as little as three minutes.

For manufacturers and distributors/dealers who offer equipment financing to their commercial customers, visit our vendor finance business to see how we support transactions from $3,000 to $25+ million.

See how our solutions can help you maximize you success.

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