equipment leasing

Why New Business Owners Are Choosing To Use Equipment Lease Financing

One of the most efficient methods of business financing recommended for both new and established businesses is equipment leasing. Equipment leasing enables a business owner to acquire all the equipment needed for its operations.

Flexible credit requirements:  Equipment leasing has  much more flexible credit requirements than traditional business loans.  Allowing even business owners with bad credit the opportunity to obtain equipment for their business.  There are leasing companies that even specialize in providing equipment leasing to new businesses.  

Benefits of Equipment Leasing For New Businesses

  • Get the best equipment for your business. Equipment leasing helps level the playing field for a new business owner, by helping to provide them access to the best equipment available on the market.   You can choose state-of-the-art equipment to maximize the performance of your business without spending a fortune.
  • Free up your working capital. Leasing generally requires only 2 payments down as a security deposit.  This is much less than the 30% most banks require.   This allows you to use your working capital for other task such as paying your employees, marketing and generally expanding your business.
  • 100% Financing. Equipment leasing not only covers the cost of the equipment but the installation cost.  It will also sometimes cover training on the equipment and other “soft cost”.
  • Free from obsolescence. Equipment leasing gives you the option to simply return the equipment once your lease term ends.  This option is usually chosen by companies that know in 3 – 5 years they will need to upgrade or buy completely new equipment.  The monthly payment on this type of lease is generally lower than the more popular $1 buyout lease option.  The $1 buyout lease option means at the end of the lease you pay $1 and you own the equipment.
  • Leasing comes with flexible repayment terms. Leasing companies offer a variety of repayment terms to match the specific needs of businesses. An entrepreneur can choose a repayment term that fits the business’s cash flow and finances. Most leasing terms run from 12 months – 60 months.  If you run a seasonal business, you need to find a company that offers seasonal payments.  Meaning you pay for the lease during your most profitable months.
  • Equipment leasing has proven reliability. Equipment leasing has long been a trusted method of business financing.  Statistics show that more than 30% of capital equipment in the US has been leased.
  • It’s Tax Deductible . The IRS allows for lease payments to be fully deductible if your business uses the leased equipment. Your business accountant can show you how you can save a lot of money on your taxes by utilizing equipment leasing.
  • Better Balance Sheet.  Monthly lease payments are viewed as a business expense instead of long-term debt. Having little debt on your balance sheet will help you to secure more financing for your business.

 

Irish Taylor is a business 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.

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Why New Business Owners Are Choosing To Use Equipment Lease Financing
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Why New Business Owners Are Choosing To Use Equipment Lease Financing
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