Whether you are a new business owner or an established company, you may be faced with the challenge of equipment financing. Should you buy new equipment or get a business bank loan? Better yet, should you apply for equipment leasing financing?
What are the benefits of equipment leasing for a small business? In this article, let’s talk about the top reasons why you should consider commercial equipment leasing.
Save your business budget.
Having a steady cash flow is important to any business. When you rent equipment, you can use available cash for other expenses and save the rest for emergencies.
100% financing.
Yes, no down payment is required to lease equipment. Unlike banking equipment loans where you must pay the cost of taxes, shipping, and installation separately, the lease is 100% financing, which means everything else is included with your payment.
Get access to the latest equipment.
As technology advances, new and better models of equipment are constantly being introduced to the market. Obviously, the latest models would cost more than the older ones. The price of the equipment may not give you the option to buy state-of-the-art equipment. On the contrary, when you rent, you can choose whatever type of equipment you want without worrying about the high price.
No to obsolescence.
As a result, the equipment you buy this year could become obsolete for years to come. The purchase limits your options, as you have invested your money in the equipment you purchased. When leasing commercial equipment, you can always have the option to retain or replace the equipment with better ones.
Free up your business line of credit.
If you are getting a bank loan and using the money to buy equipment, the high price of the equipment can eat into your business line of credit. When you rent equipment, you don’t need to deplete your business line of credit. If necessary, you can still apply for a loan and use the money to buy more supplies, for marketing purposes, or to hire more workers.
Pay in installments.
Only equipment lease financing allows you to pay for equipment as you use it. You don’t need to shell out a large amount of cash right away. You can even choose an installment payment plan (monthly, quarterly, yearly, etc.) that is best suited to your financial capacity, as most leasing companies offer flexible payment terms.
Enjoy the tax benefits.
Unlike purchased equipment, leased equipment is 100% tax deductible. Imagine how much money you can save from tax benefits alone. Every hundred you can save counts for a lot, especially if you’re just starting your business.
Never complicated.
The process of applying for a commercial equipment lease is much simpler than applying for a bank loan or equipment loan. You can shop around and compare leasing companies from the Internet and submit your application online as well. Most leasing companies grant approval in 24 to 48 hours. As soon as it is approved, you can expect to receive the equipment you requested within the next 3-4 weeks.