Dealers: Increase Sales By Helping Customers Take Advantage of Section 179
The year is quickly coming to an end, which means sales teams are pushing to make their year-end quotas, and customers are running out of time to take advantage of section 179* to save money on their taxes. As an equipment dealer, you can help satisfy both of these objectives by helping customers get the funding they need.
What is section 179?
Your first step is to educate your sales team on section 179 so that they can pass this information on to customers. Section 179 allows taxpayers to deduct the full amount of a business expense in the year the property is placed into service. This is a big deal. Instead of writing off the qualifying equipment they purchase from you a little at a time through depreciation, section 179 allows small and medium-sized businesses to write off the entire purchase price the same year the equipment is bought – up to $1,050,000. But that’s not all. Once this spending cap is reached, taxpayers may be eligible for a bonus depreciation of 100%.
Section 179 can be just the boost your customers need, especially if they’ve been struggling due to the pandemic. Even businesses that received a forgivable Paycheck Protection Program loan from the Small Business Administration can take advantage of section 179 to reduce their taxable income and save money – while getting the equipment they need to succeed in 2022. To get the most out of section 179, the total equipment purchase for 2021 must not exceed $2,620,000. After that, the deduction begins to phase out on a dollar-for-dollar basis.
Now here’s the catch: customers must put the equipment they purchase from you into service by the end of the calendar year. With supply chains being unpredictable, it would be wise to help your customers complete their purchase as soon as possible. You can do so by providing in-house financing.
How to meet the section 179 deadline
The big-bank approach to small business loans is time-consuming and cumbersome. Customers that choose to finance their purchase with a traditional loan often lose valuable time applying for a loan and waiting for approval. With no extra time to spare, customers have no choice but to accept the terms and interest rates offered if they want to receive their equipment in time to put it into service before the year ends.
When you provide customers in-house financing through a fintech firm like Triton Capital, you give customers access to competitive rates and a lending process that’s fast and easy. Your customers complete a single, straightforward application, and our Client Advocates work to get them the best terms possible – often within hours and with no down payment or additional collateral. What used to take weeks now takes minutes and hours. You get paid in full, and your customers are one step closer to reducing their taxable income for 2021 through section 179.
Don’t miss this opportunity to close more sales and improve customer loyalty. Contact us at [email protected] to discuss how we can help you give customers the highest likelihood of loan approval in less time.
*Note: please consult a tax professional for advice on your unique situation before making any purchases toward section 179. While we are experts in financing, we do not give legal or tax advice.