Are you in the market for new equipment or technology for your business but are lacking the capital to buy it outright? If you answered ‘yes’ to that question, then equipment leasing may be a viable option.
The Skinny on Equipment Leases
Every successful business comes to a point where it’s time for new equipment. But what happens when you don’t have the capital available to pay for it? Equipment leasing allows you to make monthly rental payments for a specified period of time in exchange for the rights to use the desired equipment. At the end of the lease, you usually have the option of returning the piece of equipment or buying it out for a pre-determined price.
There are many benefits of equipment leasing, but here are our top three:
Your Business Requires You to Have the Newest Technologies
Some companies get by using the same equipment for years. However, in other cases, it’s critical to keep up with the most current equipment. Have you ever thought about outdated equipment hindering productivity and efficiency? Short-term leasing allows you to keep up with the ever-changing technologies without spending a fortune.
You don’t have the capital to spend tens of thousands of dollars upfront
Equipment isn’t your only business expense, right? Lease terms are broken out into flat, affordable, monthly payments. This avoids large sums of cash dumped into new technologies all at once. Equipment leasing allows you to take that lump sum of money you’d otherwise spend on new equipment towards other, more urgent areas in need.
You want to take advantage of the tax incentives associated with equipment leasing
Unlike purchased equipment, leased equipment is tax deductible. Under Section 179 of IRS tax code, equipment leases count as a tax-deductible operating expense. Additionally, lease payments are treated as a business operating expense accounting-wise, and therefore there is no depreciation schedule to concern yourself with.
Choosing the Right Lender
Now that you’re almost sold on equipment leasing, it’s time to move on to the next step: choosing the right lender.It’s crucial to evaluate prospective lenders just as carefully as they are evaluating you. Look for someone who will act as a partner, not just another customer in their book of business.
Make sure they take time to make you feel comfortable with this important business decision, and thoroughly answer any questions you may have.