Equipment Leasing
Equipment leasing makes more sense and is more vitally productive than purchasing outright. Leasing gives a business financial flexibility, while also enabling them to stay on top of changes in technology.
Equipment leasing offers great tax advantages as well and keeps cash flow where you need it.
It is pretty simple for a business to get approved for an equipment lease because the collateral is the equipment itself. Many start-up businesses struggle to obtain financing because they don't have a lot of up front collateral to use when securing these loans.
The process of getting approved tends to be quicker than an average loan, so your business can focus on generating profits, instead of worrying about where the equipment will come from.
Equipment leasing offers great tax advantages as well and keeps cash flow where you need it.
It is pretty simple for a business to get approved for an equipment lease because the collateral is the equipment itself. Many start-up businesses struggle to obtain financing because they don't have a lot of up front collateral to use when securing these loans.
The process of getting approved tends to be quicker than an average loan, so your business can focus on generating profits, instead of worrying about where the equipment will come from.
Leasing Office Equipment : Why Lease?
Leasing equipment may seem like putting money down the drain, but it really isn't if you do the math. Thousands of businesses, startups and established, tech companies and service providers, all businesses just like yours, lease some or most of their equipment. Why? Because in the long run, it saves them money. Why invest in expensive equipment that you won't use that much, or only seasonally? Why sink all your cash into capital equipment when you can lease the same thing inexpensively and maintain your cash flow?
Four Reasons Businesses Choose Leasing
- Computers become obsolete in 18 months today - by leasing computing equipment, you avoid the costs of replacement every year and a half, as well as the headache of getting rid of the old equipment.
- In start-up businesses, the cash flow inherent in retaining $40,000 and paying only $10,000 for leased equipment pays off big time compared to outright buying things for $40,000 and keeping a cash flow of only $10,000. How hard is it to keep things going when you're billing net 30 and only have $10,000 in the bank?
- Leased equipment allows you to try it before you buy it. You're not stuck with something that does not work for you if you make a mistake.
- In an office, leasing instead of buying equipment is especially wise in many different situations. In new businesses, you may not be certain that new expansion is going to work out, or you may be concerned about how much cash on hand you'll have. Or you may flat be unable to afford it, but you need it and it will make you money.
If you can dream it, we can lease it!
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Three More Reasons to Lease
- You can write off your leasing expenses on your taxes, whereas your outright purchases have to be spread out over five years worth of taxes. You can have your accountant do the math to see how much this will play to your advantage.
- You can lease equipment in an office for the same reason you hire temps: because you don't know whether your new expansion will stick, or because you need it to fulfill a time-limited contract.
- If you lease copy machines and similar high tech equipment, you can always go back and exchange for something else, and most leasing companies also include service when they sell you equipment. Because of the service agreement, you can fix your costs, a predictability that can be invaluable in the running of a business. It also makes you inflation-proof, something that is a definite concern right now.
Leasing: A Brief Summary
In short, leasing can save you money and make your business easier in a variety of ways. If you've never considered leasing instead of buying, perhaps now is the time to do so.
Your Leasing Questions
Have an equipment leasing question? Want to comment on our lens? Say your piece!
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- BamaBabiesAndBirthdays BamaBabiesAndBirthdays Sep 22, 2009 @ 6:31 pm
- I had never really thought of business leasing much until my sister started working for a business leasing company. It makes sense though. Get what you need now without the big expense...leasing is the way to go!
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- alumnigifts alumnigifts Jul 30, 2008 @ 11:13 am
- Our business leases some of our equipment. It helped us a ton when we were starting because it freed up money for advertising and I'm glad we made that choice.
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- Cris_Stanford Cris_Stanford Jul 29, 2008 @ 1:33 pm
- My company started leasing computers last year. I wish we had found your lens first, there's lots of good information here. Business leasing can be confusing and it helps to have expert advice.
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- bob_g bob_g Jul 29, 2008 @ 6:15 am
- Great advice for business owners. So true, why spend hordes of money on equipment that may be sat in a dusty corner and used on the rare occasion.
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- errand25 errand25 Jul 25, 2008 @ 11:19 pm
- The leasing option is great for any small medium enterprise, I mean buying equipment can be such a big chunk of sunk cost, on the other hand, leasing means you pay for what you need to use -great lens!
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- StayAtHomeJobs StayAtHomeJobs Jul 23, 2008 @ 5:03 pm
- Leasing is a great option. There are so many advantages to leasing and many people don't ever realize that they exist. Fortunately, this lens addresses that.
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- GreatGoji GreatGoji Jul 22, 2008 @ 11:40 am
- Interesting lens,Equipment leasing seems an interesting option if you are planning to start a business as it could save alot of money. And you clearly made your points like having less problems with taxes unlike if you're buying equipments.
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- Jul 22, 2008 @ 7:57 am
- Leasing Equipments is really great when you are going to start a business (BIG) with minimum investment. Good Lens.
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- Yahoo-Web-Hosting Yahoo-Web-Hosting Jul 22, 2008 @ 6:48 am
- I have a friend who works in the leasing business who does very well
http://www.corporatefunding.com
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- Julieanne Julieanne Jul 21, 2008 @ 5:19 am
- It makes sense to me, to lease certain equipment. It all depends on the individual businesses' situation of course.
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