Is Equipment Leasing The Right Choice For You?
Not all small business owners have sufficient start-up capital of their own. In fact, even established businesses may still need financing assistance to support is expenses and growing needs. In this case, how can business equipment leasing be of help? Let’s take a look at the benefits of leasing business equipment:
But first, what is equipment leasing?
Equipment leasing allows an entrepreneur to “rent” the devices, machines or vehicles that are necessary to operate the business. Thus, instead of purchasing the equipment and paying for them in full, a business owner can pay get the equipment he needs and pay for them in installments.
What makes equipment leasing advantageous over purchasing?
Obviously, purchasing equipment involves huge cash. Investing on business equipment could eat up a large portion of your financial resources. On the contrary, leasing gives a new business the chance to run and start earning without spending so much on equipment. The rest of the funds can be used for other areas of the business such as in purchasing stocks or raw materials, hiring workers, leasing a business space or launching advertising campaigns.
Types of Business Equipment Lease
The terms and conditions vary depending on the leasing company. Most equipment lease providers offer the “skip lease” and the “step-up lease” options for their clients. A skip lease allows a business owner to “skip” or pass during slow months without penalties while a “step-up” lets the owner defer at least 2 months of payments without penalties. Other leasing options may be requested depending on the needs of the business.
Equipment Leasing Benefits
Equipment lease payments can be considered as part of the operational costs. Ask a professional accountant or an attorney about tax privileges that are available with equipment lease.
Leasing also gives a new business the chance to keep up with their competitors by obtaining state-of-the-art equipment at a low cost. Leasing also eliminates the risk of obsolescence. If a better version of a certain device is already in the market, a business owner can simply request his leasing company to replace his leased equipment with a new one. Certainly, this option would be difficult if the equipment have been purchased.
Finally, the process of business equipment leasing is a lot less complicated and more convenient than applying for a bank business loan. This makes leasing an ideal option especially for starting business that are in need of immediate financing assistance and have yet to establish business credit.Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2008.
Related Article: Financing Business Assets Through Equipment Leasing
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