The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is packed with tax incentives that make equipment financing even smarter when investing in new equipment and vehicles for your business. Here’s a deeper dive into three game‑changing provisions:
1. 100 % Bonus Depreciation is back — permanently
What it does: You can immediately expense the entire cost of qualifying equipment in the year it goes into service.
How it’s changed: No more phasing out over the years — write it off up front. This is perfect for businesses investing in heavy machinery, vehicles, or other equipment, and applies to new and used tangible property placed in service on or after January 20, 2025.
Why this helps: If you’re upgrading or replacing equipment, you get the full deduction right away, reducing taxable income significantly in the first year.
2. Section 179 expensing cap jumps to $2.5 million
What it does: Section 179 lets businesses instantly deduct the purchase price of qualifying assets, up to a limit.
How it’s changed: The maximum deduction was raised from $1.25 million to $2.5 million, with the phase-out now beginning at $4 million.
Why this helps: This is especially great for small- to mid‑size businesses buying lots of equipment. They can expense more upfront rather than depreciate slowly — a massive boost to cash flow and tax savings.
3. Interest deduction rebased on EBITDA
What it does: Since EBITDA adds back in depreciation and amortization, eligible businesses — especially those with asset-heavy operations — get a larger base for deducting interest.
How it’s changed: The bill restores the longstanding 30% cap on business interest deductions, using EBITDA instead of EBIT.
Why this helps: Financing equipment becomes more tax-efficient — the interest you pay on loans is more likely to be fully deductible, lowering your overall cost.
Why these changes matter for your business
| Benefit | Impact |
|---|---|
| Accelerated Deductions | Deduct more, faster — improving cash flow and reducing taxes now, not later. |
| Combined Power | Use bonus depreciation and Section 179 strategically to maximize deductions. |
| Cheaper Debt | Interest deductions based on EBITDA mean financing is more cost-effective. |
By combining these tax benefits with flexible equipment financing, your business can invest now, save big, and stay ahead.
Final take
The One Big Beautiful Bill Act is a strategic advantage for businesses planning to finance or purchase equipment. By expensing costs up front and making interest more deductible, it shifts the economics in your favor. If you’ve been on the fence about upgrades or new purchases, now is a great time to revisit those plans.
Ready to explore?
If you want to dig into how these incentives can work for your business and equipment needs, contact us today to explore your options!
About United Leasing & Finance
United Leasing & Finance is a customer-focused and growth-oriented leasing and finance company committed to providing custom financing solutions to businesses across the U.S. and Canada. For 60 years, United has partnered with clients to achieve mutual success from small businesses to Fortune 500 companies.
*The information contained here is for informational purposes only and not to provide tax, legal, or accounting advice. United Leasing & Finance assumes no obligation to inform readers of changes in tax laws or other changes that could affect the information here. You should always consult your tax professional before making any financial or tax decisions. The information here is not intended for and cannot be used for purposes of avoiding tax penalties that may be imposed on any taxpayer.
