Benefits for Businesses Leasing Equipment
New/Used Equipment is a requirement to grow your business, improve productivity and realize operational cost efficiencies. Equipment Leasing might be the best solution to meet your business needs.
A recent Gallup survey found that 80% of U.S. businesses lease a portion of their equipment. The list of companies using leasing ranges from the Fortune 500 to mom and pop shops. Consequently leasing is one of the fastest-growing ways of financing equipment in business today.
Managing cash flow is a challenge for businesses of all sizes especially when you need to add or replace equipment. Leasing can put that equipment to work for you without a major capital investment and with real cash-flow advantages. Here are the key benefits for leasing equipment:
Low Monthly Payments
Leasing gives you use of equipment without having to wait to pull the full cost of the equipment together and often requires lower payment than other methods of financing. Best of all, you can often afford higher quality equipment that is more cost effective to operate.
Acquire Equipment Without Tying Up Capital
Where other types of financing require a hefty down payment, leasing is 100% financing. Most lease agreements require an advance of only one or two month’s payment plus a security deposit. Leasing puts the equipment to work for you immediately, at a minimal up-front cost.
Protect Your Lines of Credit
Lease payments have no impact on your credit lines with your bank. Your borrowing power is preserved for other business opportunities.
Maintain a Competitive Edge
The latest and best equipment lets you do the job faster, more efficiently and cheaper than the competition. Leasing gives you the advantage of the latest available technology at a more affordable cost.
By leasing you can acquire the equipment you need today and use it cost effectively until it no longer meets your needs. You can then upgrade and avoid dealing with outdated and obsolete equipment.
Take Care of the “Hidden Costs”
Leasing gives you more than just the equipment. It also can cover the cost of delivery and installation. Your lease includes everything it takes to actually put the equipment to work for you.
When structured properly, an equipment lease agreement may allow you to receive tax benefits such as treating the lease payment as an expense. Any asset that depreciates in value should be leased so you can write it off quicker against anticipated profits.
Lease payments are little more than a line-item in your monthly cost of operations – a minimal bookkeeping effort that frees you from time-consuming depreciation schedules.
Guard Against Market Conditions with a Fixed Payment
Remember 1980, when interest rates skyrocketed from 9% to 21.5% in a single year? Unlike bank lines of credit, with variable rates, lease payments are fixed – no matter what happens to the market tomorrow.
Leasing Adds Up to Good Business Sense
- A properly tailored lease program gives you the benefit of having the equipment you need without all the risk and financial pressures.
- Leasing minimizes the demands on cash flow
- Leasing eliminates investing in obsolescence
- Leasing keeps your bank credit lines open