Benefits of Financing vs Cash

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Author: Paul FazakerleyPublished: 09 Feb 2024

When it comes to making a big purchase, such as buying an asset for your business, the two main options for payment are financing or paying with cash. While both have their advantages and disadvantages, there are several benefits to choosing financing over paying by cash.

Easier on the Budget

One of the biggest benefits of financing is that it is easier on your budget. Making a large purchase for equipment with cash means having to pay the entire amount upfront, which can be a significant strain on your business’s finances. Financing allows for payments to be spread out over time, matching the financing term to the anticipated working life of the asset, making it more manageable and less of a financial burden.

Opportunity Cost

Another important factor to consider is opportunity cost. When paying by cash, businesses are essentially tying up a large sum of money in one purchase. This means missing out on potential investment opportunities or emergency funds. Financing allows for the cash to be invested elsewhere in the business, potentially generating more income, or make strategic acquisitions, or providing a safety net.


Financing also offers more flexibility in terms of payment options. With cash, there is only one way to pay - the full amount upfront. However with asset financing, there are various options such as choosing hire purchase, finance lease or refinancing. This allows for more control over your business’s finances.

In conclusion, while paying with cash may seem like the best option at first glance, there are several benefits to choosing financing instead. Our team here at InterBay Asset Finance can help create flexible payment options that help businesses invest in essential equipment, allowing them to maximise their productivity.

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