Equipment financing and Section 179 before year end
Equipment is the easiest thing to finance, because the machine secures the deal. The part most owners miss is that financed equipment can still qualify for the deduction, if it is working before the year ends.
Two things make equipment different from general working capital. The asset itself secures the deal, so approval leans on the machine as much as on you. And the purchase may carry a tax treatment that general borrowing does not.
The timing matters more than people expect, and the deadline is not when you order.
Why equipment is the easiest thing to finance
With working capital, the funder is betting on your business. With equipment, they are also holding something they could recover and resell.
That changes the underwriting. A thinner credit file matters less, because the asset is doing part of the work.
Standard, resaleable equipment with a known second-hand market. Trucks, kitchen fit-outs, machine tools.
Highly customised or rapidly depreciating kit. If nobody else wants it, it secures nothing.
Section 179, in plain terms
Normally the cost of equipment is written off gradually over years. Section 179 lets a qualifying business deduct the cost in the year the equipment is placed in service instead.
Limits are adjusted annually for inflation. Confirm the current figures and your own eligibility with your accountant before acting on them.
Financing it does not disqualify it
This is the part owners most often get wrong. The deduction is generally based on the cost of the equipment, not on how much of it you have paid for.
So a business can finance a machine, put a modest amount down, and still deduct the qualifying cost in that year, subject to the income limit. The cash outlay and the deduction are not the same number.
Talking to your accountant before you sign, so the purchase is structured the way you intend.
Assuming a lease works the same way as a purchase. Some leases qualify and some do not, depending on how they are structured.
The cash you put down and the amount you can deduct are two different numbers. Owners routinely confuse them, in both directions.
The deadline is in service, not ordered
A signed order does not count. Nor does a deposit. The equipment generally has to be delivered, installed and available for use in your business before the year ends.
- Decide what you are buyingSpecification agreed with the supplier, with a realistic delivery date.
- Arrange the fundingEquipment finance is usually faster than a bank term loan, but not instant.
- Take deliveryAllow for lead times. This is where year-end plans most often fail.
- Install and commission itIt has to be available for use, not sitting in a crate.
- Keep the paperworkInvoice, delivery note, finance agreement and the in-service date.
Do not let the tail wag the dog
A deduction reduces tax on money you have spent. It never makes a purchase free, and buying equipment you do not need in order to save tax leaves you worse off by the difference.
Buy it because the machine earns, or because the old one is costing you jobs. Treat the tax treatment as a bonus on a decision that already made sense.
This is general information, not tax or financial advice, and Cashman Sam is not a tax adviser. Section 179 eligibility, limits, income caps and the treatment of leases depend on your circumstances and on rules that change annually. Figures quoted are the published limits for tax years beginning in 2026 and should be confirmed with a qualified tax professional before you rely on them. Cashman Sam is not a bank, a lender or a broker of record, and is compensated by funding partners when a deal completes.
