What Advantages Can Equipment Lease Financing Offer Your Business?

David NayorCommercial Lending

Every business utilizes equipment. From small office spaces with computer; restaurants with ovens, fryers, and industrial dishwashers; fitness franchises with treadmills, stationary bikes, and elliptical machines; all the way up to large-scare manufacturing operations – all companies require equipment of some sort in order to operate.

For the longest time, most business owners would buy equipment. That ownership meant they were free to use it however they saw fit, and they wouldn’t have to pay monthly fees to leasing companies. In recent years, however, more business owners have been shifting toward leasing equipment over buying it outright. Equipment lease financing offers quite a few advantages that purchasing equipment does not.

 

Stay On Top With The Newest Technology

By leasing your equipment, our business will actually save money when it comes time to upgrade – as opposed to buying your equipment, which leaves you with the burden of trying to offload it and spend more money on top of that in order to upgrade. Most equipment lease financing companies will actually have terms for upgrading and replacing equipment written into the agreement, so your business is never caught behind the times due to outdated technology.

 

Get Full Financing With No Money Down

While traditional lenders may require our business to put up collateral in order to get a percentage of the funding you need for equipment, you may be able to receive 100% of the financing you need without a down payment by leasing your equipment. This can be very handy if you are worried about placing a strain on your company’s cash flow.

 

Equipment Service & Disposal

When you purchase your equipment, the burden of storage, maintenance, training, and disposal are usually placed on the business owner. This means time and money are coming out of your business, rather than focusing on your regular operations. By using equipment lease financing, you can bundle installation, maintenance and training into the agreement, as well as having the leasing company remove any outdated equipment you have (through the lessor) when you upgrade.

 

Taxes

Many equipment leasing agreements produce lower rental rates through tax-oriented lease agreements, because the leasing company retains the title and burden of depreciation. On the other side of the coin, a conditional sale agreement actually enhances tax benefits for higher deductions for your business.

 

Maintain A Steady Cash Flow

Equipment lease financing allows you to budget your leasing expenses and integrate them into your monthly, quarterly, and yearly plans. You can also negotiate customized leasing payments with the finance company that match fluctuations in your company’s business cycle.

 

Less Risk

Equipment lease financing lowers the risk on the part of business owners, because they no longer have to buy equipment that depreciates and may only fulfill certain business needs in specific situations, while it goes unused for the rest of the year. With equipment lease financing, you are only using equipment as you need it, which saves on costs, and eliminates equipment money pits.

 

Talking With An Equipment Leasing Company

No matter what business you are in, you should consult an equipment leasing company to see what they can offer you, and compare the terms and pricing of the leasing agreement with what you would be paying to buy all of the equipment for your company. Look at the maintenance plans. Weigh the pros and cons and see if equipment lease financing is the right direction for your business.