Under current IRS guidelines, businesses may deduct up to the allowable annual limit of qualifying equipment purchases in the year the equipment is put into use. This can create substantial tax savings while allowing you to preserve working capital. 

Let’s say you are considering new equipment for your business at a cost of $25,000. You don’t want to tie up all of your cash or your lines of credit so you choose financing. You secure financing through Banleaco, take delivery of the equipment and put it into use by July 1st.

Assuming you are in the 21% tax bracket your purchase could save $5,250 in federal taxes. ($25,000 for the equipment x 21% federal tax). Based on a 60 month term, your payments would be $2,892 through the end of the year.

The tax savings cover the payments and!

In this example, the potential tax savings would exceed the payments made during the same period – leaving you nearly $2,400 in your pocket, preserving cash flow, while putting the equipment to work immediately.

This example is for illustrative purposes only. Tax laws and eligibility requirements are subject to change. Please consult your tax advisor regarding your specific situation.