What Changed: The Facts
The new tax law, signed July 4th, 2025, fundamentally altered equipment investment economics:
- 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
- Manufacturing facilities receive 100% depreciation through 2030 via Qualified Production Property (QPP) provisions
- EBITDA-based business interest deduction restored through 2029
- Qualified Business Income (QBI) deduction made permanent at 20% with $400 minimum for qualifying businesses
The Sales Transformation
Your customers aren’t buying equipment anymore—they’re making tax-optimized investment decisions. A $500,000 equipment purchase that previously required seven-year depreciation now generates immediate tax benefits of $105,000-$185,000. For manufacturing customers, facility investments can deliver even larger immediate benefits through QPP provisions.
This shifts every sales conversation from “Can we afford this equipment?” to “What’s the after-tax investment return?” Equipment sellers who understand these new economics can demonstrate value that transcends price competition.
The R&D Equipment Opportunity
Technology companies and manufacturers with R&D operations can now immediately expense specialized equipment investments that deliver immediate tax benefits. This creates new market segments for equipment sellers who understand the intersection of specialized equipment needs and tax optimization.
Manufacturing’s Strategic Advantage
The QPP provisions allow manufacturers to immediately expense entire facility costs for construction beginning between January 19, 2025, and January 1, 2029. This creates opportunities for integrated equipment-facility sales that were previously uneconomical due to long depreciation schedules.
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 meeting borrower needs across different credit profiles.
Creative financing partners can bridge this gap by structuring transactions that maximize tax advantages while addressing the financing constraints that prevent companies from capturing these benefits. When lending is tight, the lenders who can find creative solutions capture disproportionate market share.
The Strategic Positioning
Equipment sellers who partner with sophisticated financing sources can offer customers complete solutions that optimize both equipment selection and tax benefits. This positions you as a strategic advisor rather than a vendor, creating deeper relationships and larger transaction values.
The timing requirements—equipment must be “placed in service” during the tax year—create urgency that benefits sellers who can deliver both equipment and optimized financing quickly.
Taking Action
Companies are recalculating their equipment budgets based on these new tax economics. The sellers who understand these implications and can deliver financing solutions that maximize benefits will capture the lion’s share of these opportunities.
Ready to turn tax law changes into competitive advantage? ELGA’s equipment finance solutions are designed to help your customers maximize these new tax benefits while preserving their banking relationships. Our team understands the intersection of equipment financing and tax optimization, delivering creative solutions when traditional lenders fall short.
Contact ELGA today to discover how our financing expertise can differentiate your equipment sales and accelerate your revenue growth.