Questions to ask yourself before buying a new piece of equipment

All business purchases need to be justified, well planned and appropriately funded or you run the risk of wasting your hard-earned cash. Here are some questions to ask yourself before you buy a new piece of equipment, one of which is how you’ll pay for it.

The first step to validate a purchase is to assess its income generating capability and the payback period. This will determine if the new asset is immediately worth-while or if you may need to re-evaluate your decision. Essentially, the payback period is the amount of time it will take for the cash inflows generated by the equipment to repay its purchase price.

What are the ongoing costs?

To accurately determine the payback period, an honest evaluation of the ongoing costs, lifespan and maintenance of the product must be undertaken.

How will you fund it?

Finding the right finance arrangement can play a large role in growing your business. Asset finance options such as equipment rental, equipment loan or finance lease could be in your best interest and allow you to develop your business further while freeing up cash flow in the short term.

Bigstone Finance can offer fast, flexible loans from $10,000 to $2,000,000 for assets and equipment for your business.