New tax rules require fresh analysis for equipment financing

Screen Shot 2018 04 05 at 1.05.03 AM - New tax rules require fresh analysis for equipment financing

Obtaining the equipment your business needs to grow and stay competitive remains imperative, but the recent tax law could change how these acquisitions affect your business.

Amidst the first tax overhaul in three decades, businesses are positioned for growth and profitability. Leading-edge technology, timeliness and scalability all play important roles in an organization’s decision to acquire assets. While corporations have historically identified successful go-to strategies to take advantage of equipment-related tax legislation, the playing field has changed.

The Tax Cuts and Jobs Act of 2017 (TCJA) won’t change the tried-and-true benefits of leasing that have always supported business growth. But commencing 2018, most machinery and equipment used in a farming business will have a shorter recovery period. These items, which were previously seven-year property, will become five-year property as of 2018. Looking beyond the temporary increase in expensing available, these changes permanently accelerate the recovery period for many agribusinesses, thereby increasing the annual depreciation available for the equipment owner.

Assessing your business’s current and future asset needs in the form of a Lease vs. Buy Analysis will help determine whether a lease or loan is the best alternative for your organization. Now more than ever, it’s imperative to seek a professional with a tenured history in lease structuring, in-depth knowledge of the equipment specific to your business, and an understanding of your organizational goals. KeyBank can help you develop the most profitable acquisition strategy, by consulting with one of our equipment financing experts.

Learn more about KeyBank’s experience and expertise in the Food and Agribusiness Industry, as well as Equipment Financing, by downloading their latest white paper.

The information and recommendations contained herein is compiled from sources deemed reliable but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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