Updated Section 179 Tax Deductions for Businesses
Wondering what is new for the 2019 tax year for small businesses? Interested in how Section 179 can help before the end of the year? Below is an overall, general view of the Section 179 Deduction for 2019.
2019 Deduction Limit = $1,000,000 (one million dollars) – This deduction is good on new and used equipment, as well as off-the-shelf software. To take the deduction for tax year 2019, the equipment must be financed or purchased and put into service between January 1, 2019 and the end of the day on December 31, 2019.
2019 Spending Cap on equipment purchases = $2,500,000 – This is the maximum amount that can be spent on equipment before the Section 179 Deduction available to your company begins to be reduced on a dollar for dollar basis. This spending cap makes Section 179 a true “small business tax incentive” (because larger businesses that spend more than $3.5 million on equipment won’t get the deduction.)
Bonus Depreciation: 100% for 2019 – Bonus Depreciation is generally taken after the Section 179 Spending Cap is reached. The Bonus Depreciation is available for both new and used equipment.
Here’s How Section 179 works
In years past when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.
This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2019 tax return (up to $1,000,000).
Limits of Section 179
Section 179 does come with limits – there are caps to the total amount written off ($1,000,000 for 2019), and limits to the total amount of the equipment purchased ($2,500,000 in 2019). The deduction begins to phase out on a dollar-for-dollar basis after $2,500,000 is spent by a given business (thus, the entire deduction goes away once $3,500,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.
For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please read the entire Section 179 website carefully.
Congratulations Raffle Winners at this year’s AACFB Annual Conference!
We hope that you enjoyed your time at the annual AACFB Conference. It was a pleasure meeting so many of you. What a productive three days it was! We are excited to expand our partnerships and look forward to developing a mutually beneficial business relationship with you!
Be sure to read Shervin’s Write-up on the conference in Leasing News by
To learn more about SLIM Capital, our products, and our partnership information
visit us at: www.slimcapital.com
Jeff Brannon & Shervin Rashti after a full day at the conference
Jeff Brannon & Stephanie Cruz at the AACFB Thursday night reception
The view of the beautiful pool at Caesars Palace
Game Theory and Small Business Lending…
and How They Intersect
- This website says I can get $100k in 3 hours, but does this online portal really understand my business and what I need the money for?
- The bank is asking for 3 years of everything and says it is going to take 60 days. Do I have time to wait 2 months just to be back in this position again?
- There seems to be a bunch of alternative type lenders that will listen to me, but they all sell different products and are trying to push theirs on me. How do I know what’s best for me?
SPRING TIME IS THE BEST TIME FOR APPROVALS
Let SLIM Capital help you spring into action for your deals and help you get them approved
BOTH Credit Based and Collateral Based Programs,
to brighten your day!
$500,000 Building Scaffolding Hoists
This company does temporary suspended scaffolding. The owner has been in the industry for 15 years, but started his own company 3 years ago. They are licensed as a “Special Rigger” in NY to supply equipment to vendors that do window washing, caulking, brick repair/replacement. After waiting 4 years to obtain this license, our lessee was anxious to save on rental payments and own his own equipment. With city statutes requiring facades to be changed every 5 years, they had a lot of pent up demand for new hoists to fulfill an existing contract. We approved the entire amount with no cash down and no additional collateral requirement for a 36-month term.
SKY is the LIMIT for this LESSEE!
$80,000 Start Up Dry Cleaner
This client has 15 years’ experience in running dry cleaning operations. She incorporated almost 2 years ago and has steadily acquired the necessary equipment to open. She was approved by an A tier lender but they wanted 20% down. She did not want to put the 20% down and was open to paying a higher cost of capital to keep those funds. Start-ups are risky, but secondary income and low expenses sparked our interest in the deal. Total amount of the dry-cleaning equipment is $80K. SLIM was able to fund the deal on a 48-month term and without the 20% down.
This one ended up with a “clean” happy customer.
$200,000 Auto Body Expansion
This client began his operations as a hand car wash and expanded into selling used cars and auto body repair. Realizing his larger margins in body work, he decided to grow that side of the business by building out the vacant area next to his existing building by adding bays for body work. Typically, because it is considered a separate business, Auto Body repair, most lender would consider it a startup but SLIM understood the story, took a lien on the property as collateral and approved the deal for a 48-month term.
Auto Body Repair has a whole new look!
$320,000 Two 2019 Trucks
A Trucking company that was looking to grow its fleet of 15 trucks by adding two new trucks. We reviewed the cash flows, the credit, the overall profile and approved 2 trucks with NO MONEY DOWN on a 60 month term. The challenge here was that the client had maxed out limits for financing from the captive finance lenders and needed an affordable solution.
Don’t forget our application only programs go up to $150,000:
- 3 years TIB
- 650+ FICO
- $500,000 with Light Financials
- $3,000,000 Full Financial Package
Call us to learn about others and see if we can help your clients!
SLIM Capital, LLC is a nationwide direct finance company that specializes in securing hard assets to structure financing transactions as well as Credit Based Financing Decisions. We consider equipment with a strong secondary market value, real estate and other assets that can be easily monetized as collateral. Give us a call or email us with any deals that you think might be a fit.
Wishing You a Joy Filled Week
It’s okay to put all your eggs in SLIM’s basket!
We should be your resource for almost any type of deal.
- Equipment Financing
- Working Capital
- Sale Leaseback
- Cash out Refinance
Here’s what we need to offer you an approval:
App – Only to $150k
- 3 month Bank Statements
- Equipment Quote
$150k – 500k
- Most Recent Interim Financials
- Most Recent Tax Return
- Debt Schedule
- Personal Financial Statement
- 3 years Personal and Business Taxes and Financials
- Application – Include detailed use of funds
- 3 months Bank Statements
- List of Collateral (Real Estate Worksheet or Facilities List)
- Personal Financial Statement
Owner/Operator:App Only (UP TO $150,000)
- Min 650 FICO
- Signed SLIM Credit Application
- 3 years Time in Business
- 3 Months Complete Bank Statements
- Minimum 5-Figure Deposit Average
- Quote or Invoice
With Equipment Finance rates as low as 6.9%, there has to be a way we can help you and your clients with financing needs. We offer terms up to 72 months and love new equipment.
We are ready to help you with your deals! Why wait, submit your deal today.
- Building Your Own Portfolio @ 2:45PM – Shervin
- How to Get Vendor Business @ 4PM – Jeff
Here is the link for more information about the conference:
SLIM Capital, LLC is a nationwide direct finance company that specializes in financing equipment acquisitions for our clients. We have credit based programs as well as collateral based programs that secure hard assets to structure financing transactions. We consider equipment with a strong secondary market value, real estate and other assets that can be easily monetized as collateral. Give us a call or email us with any deals that you think might be a fit.