Why Purchase Used Business Equipment

A Good Reason To Purchase Used Business Equipment
New entrepreneurs during the business startup phase often overlooked a very important and basic fundamental of equipment asset management. That fundamental is to only purchase new equipment only as a last resort.

Experienced business people know that purchasing new business furniture, fixtures and equipment (FF&E) takes an immediate and dramatic decline in value the moment you purchase it. It takes on a value known as "Fair Market Value" or "FMV" which is basically what someone else is willing to pay you for it now that it is used. The difference between new and fair market value is often substantial.

Another consideration to take into account, is the value that is placed on business assets when a company is listed for sale or sold. FF&E assets become scrutinized by a potential buyer and are usually deemed by their accounting counsel to have a lower value than fair market value (although they will request a higher value for them within the sale allocation - to gain more depreciation for their client). Also, often business values are considered upon a multiple times of net cash flow to the owner. It makes sense that the less you spend on a piece of equipment that produces the same result, the more money you realize from the savings of purchasing used equipment ultimately provides a better financial result for the business and also a return from the sale of the business assets.

There are a lot of great deals available on gently used equipment. Do the research and analysis of net cost new versus buying it used. Also keep in mind, what you pay for it used is probably what you can immediately sell it for in the short term. In addition, research refurbished equipment that is available on the market with limited guarantees. We have seen significant savings with that type of used equipment. Business liquidations can also offer substantial savings on business equipment.