By: John Pfister, CLFP, CEO and Co-Founder of MAZO Capital Solutions
In August, Fed Chair Powell signaled a shift in priorities, emphasizing employment over strict price stability while showing greater tolerance for rising asset prices.
This approach creates an environment where equipment values could remain high even as financing costs begin to decline, making timing and strategy for financing equipment more critical than ever for businesses considering new equipment purchases.
For the past two years, businesses have navigated one of the sharpest interest rate tightening cycles in decades, with higher borrowing costs prompting some to pause or delay essential equipment investments. Now, with the Federal Reserve pivoting, the financing landscape is shifting, creating opportunities for businesses that act strategically.
Here’s what this means in practical terms:
Financing Advantages – According to The Monitor,
“With immediate 100% expensing, equipment purchases provide immediate tax benefits that reduce after-tax costs by 21-37% depending on the buyer’s tax rate.
A $1 million piece of manufacturing equipment effectively costs $630,000–$790,000 after taxes.”
Tax Timing Advantage – Pairing lower financing rates with Section 179 deductions allows businesses to accelerate purchases, deduct the full cost of qualifying equipment in the current year, and pay it off over time.
Working Capital Considerations – Immediate tax benefits combined with potentially higher equipment costs (due to tariffs or market shifts) can create cash flow challenges, making additional working capital necessary.
Vendor Impact – Dealers and OEMs offering customer financing now find their programs more attractive, helping remove objections from buyers who may have delayed purchases during the high-rate environment.
Taken together, the Federal Reserve’s shift represents a rare window of opportunity:
Businesses can capture the full tax benefits of Section 179 while locking in equipment under favorable financing terms, a combination that may not last if inflation pressures return or rates reverse course.
Business owners today face a critical decision: invest in the equipment you need now, or wait to see how interest rates, tax incentives, and the broader economy evolve?
The complexity is real, but understanding these forces can help businesses act with confidence rather than hesitation.
Interest rates have been on a volatile path. While there’s talk of eventual cuts, no one can predict exactly when or by how much.
Waiting for the “perfect” rate can mean missing opportunities to grow, serve more customers, or outpace competitors. Financing can mitigate some of the uncertainty by allowing businesses to lock in known terms today and put equipment to work right away, even while rates continue to shift.
One of the most overlooked factors in timing an equipment purchase is the U.S. tax code.
Under Section 179, businesses can deduct the full purchase price of qualifying equipment in the year it’s placed into service, rather than spreading the deduction over time.
For many, this creates an immediate and significant cash benefit.
Businesses can deduct the full purchase price of qualifying equipment in the year it’s placed into service, rather than spreading the deduction over time.
Layer on bonus depreciation, which accelerates how much of that equipment cost can be written off, and the financial advantage grows even stronger.
In some cases, financing equipment while still taking the full Section 179 deduction creates a “double win.” Businesses can preserve cash while maximizing tax savings.
For a quick estimate, try the Section 179 deduction calculator.
No one can argue that the world is changing quickly, creating both challenges and opportunities. During times like these, it is tempting to wait to acquire equipment, but the cost of doing nothing carries its own risks:
In other words, delaying isn’t risk-free. Acting now means locking in today’s benefits and putting your equipment to work immediately.
Cash flow is the lifeblood of every business. Large, upfront equipment purchases tie up capital that could be used for payroll, expansion, or other business needs.
By financing equipment, companies spread costs over time and stay nimble. That flexibility is especially valuable in today’s uncertain environment, where sudden shifts in demand, supply chain disruptions, or new opportunities require agility.
At MAZO, we create vendor financing programs that help dealers close sales and help customers access the equipment they need. By offering business equipment financing online that’s tailored to today’s environment, we make it easier to move forward with confidence.
If you’re a dealer navigating a tough market, explore our guide on selling in uncertain times for practical strategies to keep deals moving. And if you’re considering a purchase, review our insights on how the “Big Beautiful Bill” can benefit your tax position.
Ultimately, the decision to finance equipment today or wait comes down to strategy. Consider:
With the Federal Reserve’s pivot reshaping financing conditions, now is the time to act strategically. Partnering with the right vendor financing company can turn uncertainty into opportunity: helping you capture Section 179 benefits, optimize cash flow, and secure equipment at favorable terms.
Business leaders who consider rates, tax incentives, and financing holistically will be best positioned to make confident, forward-looking decisions – and stay ahead in a rapidly changing market.
