Why Financing Equipment Can Be Smarter Than Saving When Inflation Is High

Business owners often wonder: Is it better to save cash for equipment, or finance the purchase? While saving may feel safer, in times of high inflation, financing can actually be the smarter move. Here’s why.

How Inflation Impacts Equipment Purchases

Inflation means the cost of equipment, vehicles, and machinery rises over time. If you plan to save for a big purchase, you could be chasing a moving target.

For example, if a piece of equipment costs $100,000 today, and inflation runs at 8% annually, that same equipment could cost $108,000 next year—or more. Waiting doesn’t just delay your growth; it makes the purchase more expensive.

Financing Locks in Today’s Prices

When you finance equipment, you lock in today’s cost. Even though you’ll make monthly payments, you’re paying with future dollars that are worth less than they are today. In other words, inflation can actually work in your favor.

Financing advantage example:

• Finance today: $100,000 machine, payments spread over several years.

• Save and wait: $114,000 or more in just 18 months of inflation—plus lost revenue from not having the machine in use.

  
  

Financing Preserves Cash Flow

Another advantage of equipment financing is cash flow flexibility. Instead of using all your cash reserves to buy equipment outright, financing allows you to:

• Spread costs over time

• Keep working capital available for payroll, supplies, and operations

• Take advantage of opportunities without being cash-strapped

  
  

The Strategic Benefits of Financing During Inflation

For many businesses, financing during inflation provides:

• Protection against rising equipment costs

• The ability to generate revenue sooner

• Payments that become easier to manage as future dollars lose value

• Peace of mind knowing cash is available for other needs

  
  

Should Your Business Finance Equipment Instead of Saving?

If inflation is eating into your purchasing power, financing may help you move faster, protect your cash, and stay competitive. Every business is different, but in many cases, financing equipment during high inflation is the strategic choice.

About the Author

   Jared Holmes is the founder of Brilliance Funding Partners, where he helps business owners navigate the commercial lending landscape with confidence. With 9 years of hands-on experience in SBA lending, equipment financing, and working capital solutions, Jared focuses on asking the right questions and delivering financing strategies that make sense for each business. Connect with Jared for a personalized conversation about your options.