The timing is right for investing in flexo. U.S. economic analysts have indicated that the U.S. economy will have multiple key “bright spots” in 2015 including a rapidly improving labor market, increased access to credit, lower oil prices, and fiscal healing. “Overall, we expect the strengthening labor market to propel [gross domestic product] growth to 3.3% in 2015, which is slightly above consensus forecasts,” based on an economic survey. The U.S. has not seen this growth since 1999!
The flexo industry is one of our economy’s “bright spots”. Our industry continues to make new and innovative advancements which are dramatically improving print quality, efficiencies, and shelf appeal. Some examples of these are enhanced prepress workflows, new computer-to-plate technologies, next-generation HD flexo plates, and pressroom productivity improvements with higher speed, faster changeover presses.
So the conditions are right for investing in flexo, and thanks to Section 179 of the IRS tax code, the timing is right. Section 179 is a tax deduction that helps small businesses save money on the purchase of new equipment. It does not increase the total amount the small business owners can deduct, but it allows them to take their entire depreciation deduction in one year, rather than taking a little at a time over the term of an asset’s useful life.
Many customers who are looking to increase efficiencies, sales, and profit margins with new equipment are concerned about affordability and banking regulations that may put their line of credit in jeopardy.
Though the banks do provide a company’s line of credit, it’s important to remember that banking restrictions do put a cap on a bank’s total exposure to any one company and its principals. By diversifying your lending (i.e. financing your equipment needs through a lender that specializes in your industry and letting your bank handling your bank line of credit needs), you will never find having to hunt for a new bank.
Take advantage of Section 179 while the rates are still low and write off $25,000 of new or used equipment and software installed in 2015.
If you use a finance structure tailored to your specific budget needs, the equipment will pay for itself and not jeopardize your line of credit. This is the time to get your New Year Goals off to a great start.