The Advantages of Equipment Leasing
If you’ve heard of equipment leasing but aren’t sure whether it is the right solution for your business, you might want to explore this option further. Leasing business equipment could be exactly the right choice under many circumstances.
The following are some of the primary benefits associated with equipment leasing.
The Financing is Easy
Financing the lease of equipment can be much easier than securing a loan to buy it. Banks don’t always approve applications for such loans unless a business can produce a few years of business records. Thus, a new business would probably be disqualified from getting this kind of loan through a bank. By leasing the necessary equipment via an alternative lender, a new business owner can get the equipment needed for operation.
Many types of businesses require equipment that must be continuously upgraded. This is certainly true for any business that relies on certain kinds of electronic equipment or the latest technology. By leasing what is needed, a business owner does not need to purchase items that will be obsolete relatively quickly.
Businesses can usually claim an equipment lease as a business expense. By doing so, a business could then claim the lease payments as a deduction against present earnings.
More Cash Flow
By leasing equipment, a business will spend less capital on what is needed for production. Instead of paying a large lump sum, a business can make much smaller monthly payments. This makes the cash available for other expenses, such as expansion, salaries, and advertising.
Maintenance and Repairs
In most cases, equipment repairs and maintenance are not the responsibility of the people leasing equipment. Instead, the company that owns the equipment is responsible for such upkeep. This could significantly ease the financial burden of a business that is struggling to stay afloat. It could also prove beneficial to a business that is thriving, but that experiences low cash flow during certain periods.
Equipment leasing can be a viable strategy for an array of reasons. If your business requires equipment to remain in operation, consult the team at Growth Lending Group today.