Can Equipment Expensing Help in Small Business Financing?


It is no secret that most entrepreneurs have difficulty in getting small business financing even though interest rates have been lowered considerably. Most entrepreneurs are looking for government grants to help with the funding of their business however, this may cause for more government involvement in what should be a private sector.

There are other options for an enterprising business person and one of them is equipment expensing. According to the proposal of President Obama, small businesses who purchased business equipments or other capital assets would qualify for tax deductions. A detailed description of of how equipment expensing can be used for small business financing can be found in the article Equipment Expensing as Low-Cost Financing.

So how does equipment expensing work? Because of the tax deductions for the business equipments that you have purchased for your company, there are cash savings upfront that you can use for other expenses. There is no permanent change on the tax code as of yet and according to the tax-cut proposal, this tax break for equipments would only be good for those that have been purchased before the end of 2011.

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