What Changed: The Facts
The New tax law created an entirely new category of high-value transactions:
- Section 179 deduction increased from $1 million to $2.5 million (phase-out begins at $4 million)
- 100% bonus depreciation permanently restored for property placed in service after January 19, 2025
- Immediate R&D expensing restored for domestic research activities (retroactive to 2021 for businesses under $31M revenue)
- Manufacturing facilities receive 100% depreciation through 2030 via Qualified Production Property provisions
- EBITDA-based business interest deduction restored through 2029, increasing debt capacity
- QBI deduction made permanent at 20% with $400 minimum for qualifying businesses
The Commission Opportunity
Your clients can now capture immediate tax benefits worth 21-37% of equipment cost, fundamentally changing investment economics and transaction sizes. Manufacturing companies can immediately expense entire facility costs through QPP provisions, creating multi-million dollar financing opportunities with substantial commission potential.
The Section 179 expansion alone creates opportunities for transactions that were previously uneconomical due to limited tax benefits. Combined with restored 100% bonus depreciation, your clients are recalculating their entire capital investment strategies.
The Complexity Advantage
The IRS requires specific sequencing of deductions—Section 179 first, then bonus depreciation—and equipment must be “placed in service” during the tax year to claim deductions. These requirements create opportunities for brokers who understand optimal structuring while creating barriers for those who don’t.
Your clients are asking different questions now: “How do we structure this to maximize immediate benefits?” “What’s the optimal timing for equipment delivery?” “How do we optimize the sequencing of deductions?” Brokers who can answer these questions aren’t competing on rates—they’re creating value.
The R&D Equipment Surge
Technology companies and manufacturers with R&D operations can now immediately expense specialized equipment investments. The retroactive provisions for businesses under $31M revenue create opportunities to help clients identify refund opportunities while structuring new investments for maximum benefit.
The Financing Challenge
While the tax benefits are substantial, tight lending conditions mean many companies struggle to access the capital needed to capture these opportunities. Traditional lenders often lack the flexibility to structure transactions that optimize tax benefits while serving clients across different credit profiles.
Creative financing partners can bridge this gap by understanding both tax optimization and the realities of current lending markets. When lending is tight, the lenders who can find creative solutions capture disproportionate market share—and generate higher broker commissions.
Sale-Leaseback Opportunities
The restored depreciation benefits create powerful incentives for companies to monetize existing equipment assets through sale-leaseback transactions. Companies can sell equipment to realize favorable tax treatment, then lease it back to maintain operational continuity while freeing capital for new investments.
This creates multiple commission opportunities from single relationships while helping clients optimize their capital structure.
Market Timing Advantage
The combination of enhanced tax benefits and tight lending conditions creates urgency for companies to accelerate equipment investments. Brokers who understand these timing considerations and can deliver creative financing solutions will capture transactions competitors miss.
The Strategic Positioning
The brokers who understand these tax implications and partner with lenders capable of delivering tax-optimized financing structures will capture disproportionate market share. Your clients need sophisticated solutions that maximize tax benefits while addressing the financing constraints that prevent them from capturing these opportunities.
The companies generating your largest commissions—mid-sized businesses with substantial equipment needs and sophisticated financial teams—are exactly the ones most likely to benefit from these provisions. The brokers who can deliver creative financing solutions for these opportunities will dominate commission generation.
ELGA specializes in delivering creative financing solutions that help your clients maximize these new tax benefits while addressing the financing constraints that prevent them from capturing these opportunities. Our expertise in structured transactions and ability to work with challenging credits means you can bring solutions to transactions other lenders pass on.
Contact ELGA today to discover how our financing expertise can help you capture these high-value opportunities and differentiate your services in the new market landscape.