Every business needs to acquire equipment at some point, whether it is computers, copy machines, furniture or something more specific to your needs. There are several financial decisions that need to be made regarding the equipment including, will you purchase or lease and will the equipment be new or used.
The option you might be the least familiar with is leasing. Equipment leasing can offer your company many options and benefits that can be used to acquire both new and used equipment.
Leasing lowers your initial out-of pocket expenses
Equipment leasing allows you use of capital generating equipment, without the huge cash outlay associated with a cash purchase. Typically, only the first and last month’s lease payments are required at contract signing and equipment delivery. This way your working capital lines are left available.
Leasing can cover costs such as warranties, maintenance, supplies and installation
Equipment lease agreements can cover these costs, saving you money and aggravation.
Have equipment that is current with technology and avoid issues that arise from being stuck with obsolete equipment
Leasing equipment makes it easier for you to upgrade so you stay current with the advancing technology when the lease term is up you have the option to exchange the equipment, unlike if you had purchased it. This will save you time and money; while helping you attract and retain employees that want to work with updated technology.
Leasing your equipment is easier than obtaining a bank line of credit and it can offer more flexible terms. Equipment leasing terms include items such as payment amounts that are adjusted to take into consideration the seasonality of a business’s cash flow, options to purchase the equipment once the lease has ended as well as options to purchase your existing equipment to increase your cash flow.
Leasing offers tax benefits
Depending on the type of lease you choose the payments can be treated as a company expense and can be tax deductible. Additionally, you don’t have to worry about the sometimes frustrating depreciation calculators come tax time.