The Advantages of Equipment Leasing

If you own and operate a small business, then the tools that allow you to conduct that business are your lifeline. Whether that equipment is a brush hog, combine harvester or state-of-the-art printing machine, the performance of that machine directly impacts your bottom line. While each piece of machinery is vital to your bottom line, that does not always mean you have the funds to buy a new piece of equipment as needs arise or old equipment breaks.
What can you do when you find yourself in need of a multi-thousand dollar piece of machinery? Or even equipment in excess of hundreds of thousands of dollars? There are options for business owners who have extended all their capital. If your business has a limited amount of capital to draw from, then choosing which equipment to buy and which to lease is a calculated choice; both sides have pros and cons. Here are a few of the advantages of leasing equipment rather than financing equipment or buying it.
First of all, the lifespan of the machine or equipment should be a major factor into when you take out equipment loans and when you lease. If you are looking at a machine with a lifespan of 10 or 20 years, then it may be in your best interest to use your capital or seek equipment financing to go Debt Trap ahead with an outright purchase of such an item. But let’s face it, there are very few machines that last that long or stay relevant for that long. If your business is such that it must stay current with developing technologies, then leasing is the perfect way to keep up with the latest tools.
Leasing does come with less initial cost, which means you will be able to save that capital for other expenses, upgrades or investments that come along. Most lease terms do not require a down payment or collateral, so you can keep all your liquidity and not affect your cash flow.
While you may have some savings up front, the long term cost is usually guaranteed to be more than it would have been if you purchased it. Even taking out business equipment loans can be a cheaper option than leasing. Although equipment leasing options typically have flexible terms, the financing is not usually as favorable as the loans you may be able to secure through your business. However, if you are a new business or have exhausted your lending options, then leasing is a viable choice for you. You can assess your financing options on a case by case basis, as each business and purchase will vary.
One advantage to consider about leasing over finding financing loans for equipment is that you will be able to swap or upgrade more easily by leasing equipment for two or three years. If you take out loans for equipments or purchase machines outright, they Best Company To Do Financial Analysis are yours. There is usually no calling the manufacturer and working out a deal to swap out an old model for a newer version. Leasing equipment can give you an edge over your competition by being able to use the most efficient and smart technologies.
These are just a few of the variable when it comes to buying, financing or leasing equipment. The beauty of business is that you may find it suitable to use a combination of all of these options for various needs in your business.

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