Running a successful bakery business requires more than just some good recipes and a passion for your craft. Whether you running a small bakeshop or a large wholesale facility, the production of your quality artisan breads, pastries, cookies, cakes, bagels and more requires good quality bakery equipment. Durable, reliable baking equipment will help keep your bakery running at optimum efficiency and will ensure that you maintain the consistent product quality that your customers expect.

Acquiring the bakery equipment you need to run a successful operation can seem overwhelming. Bakery equipment financing, (also referred to as bakery equipment leasing), offers many advantages over traditional forms of funding and can prove to be an excellent choice for both start-ups and established bakeries.

The Benefits of Bakery Equipment Leasing

According to the Equipment Leasing Association of America, approximately 80 percent of U.S. companies lease some or all of their equipment today. Here are just some of the reasons why so many choose to take advantage of equipment leasing:

  1. piggySave Cash and Maintain Working Capital

    Of all the advantages equipment leasing has to offer, this is perhaps the biggest. Equipment financing preserves working capital that would otherwise be used if you were to pay cash for your equipment. With an equipment lease program, you make affordable monthly payments over a set period of time. This provides the equipment the opportunity to pay for itself!
  2. Fixed Financing Rates
    Fixed rate financing options are very common when it comes to bakery equipment lease programs. This gives you the advantage of knowing exactly how much you will be paying month over month for the term of the lease.
  3. Preserve Your Lines of Credit

    You know how important it is to keep you business line of credit open and in good standing. Operational expenses, staffing and expansion all require a solid credit history and keeping your line open allows you to respond quickly in the event of an emergency. Bakery equipment leasing allows you to keep you business line of credits free and open for you to use when it matters most.
  4. Tax Advantages

    Equipment leasing can provide your business with some great tax advantages. For example, the Section 179 Tax Provision will allow you to deduct up to $500,000 worth of qualifying new and used business equipment for 2013. The IRS may also allow your lease payments to be fully deductible as long as the equipment is in use. Be sure to speak with your accountant to find out which tax advantages may be available to you.
  5. balance_sheetAttractive Balance Sheets
    Finally, bakery equipment leasing can even make your company's balance sheet look good! That's because leased equipment will show up on your business statement as a monthly business expense instead of a purchase. Any business owner will tell you, having little or no debt on your company’s financial statements can be a big benefit in the long run.

Drawbacks of Equipment Leasing

Leasing is not without its downside as well. Typically, the total cost of the equipment over the life of the lease will be higher than if you bought the equipment outright. When it comes to start-ups, because they tend to have little or no credit history they may find obtaining a lease challenging. If you find yourself in this situation look for leasing companies that will consider your personal credit history during the approval process.

The Bottom Line

For many, equipment leasing offers an excellent opportunity to acquire the bakery equipment they need without having to exhaust existing cash and credit reserves. Every lease decision is unique, so it's important to study the agreement carefully to make sure your getting the best deal. If you have questions or need to know where to go to get started, be sure to turn to a trusted an reliable bakery equipment company to get started. When done properly, bakery equipment financing can often allow your new equipment pay for itself!