How Leasing Equipment Can Save You Money


ave you ever considered leasing your equipment rather than buying it outright? Read on to see how leasing resources can save you money and benefit you in many other ways.Are you a budding entrepreneur looking to equip your new business? No matter what you may need—computers, desks, heavy machinery, etc.—you obviously want to make the most efficient purchasing decisions possible. Have you ever considered leasing your equipment rather than buying it outright? Read on to see how leasing resources can save you money and benefit you in many other ways.

Lower Initial Investment

Especially with businesses that are just getting off the ground, a low upfront cost is a huge advantage to leasing over buying. Many financial services companies save you money with an equipment lease program specially designed around your specific needs and budget.

“Many small businesses struggle with cash flow and must keep their coffers as full as possible. Because leases rarely require a down payment, you can acquire new equipment without tapping much-needed funds,” explains Peter Alexander of Entrepreneur.com.

Keep up With Technology

The financial experts at Trade Capital Funding note that when you rent equipment, you can more easily upgrade to the most up-to-date model. You aren’t stuck with old technology that cost you a fortune when you bought it; you are free to upgrade in a shorter amount of time. This also helps you keep up with your larger, more financially capable competitors, so you don’t lose as much ground to them by using out-of-date tech.

Save on Maintenance

This is another area in which you can save additional funds. According to the U.S. Department of Commerce website: “You not only conserve your company’s cash, but you can save a substantial amount of money in repairs, upgrades and maintenance since many lease agreements cover these expenses.”

Less Room for Budgeting Mistakes

Because payments are fixed and regular when leasing equipment, you have a predetermined monthly line item, leaving less room for costly fiscal mistakes. In fact, 35 percent of respondents in an Equipment Leasing and Financing Association survey said this was leasing’s second greatest benefit.

Flexible Terms and Tax Advantages

Just the thought of applying for a business loan sends many new business owners’ heads spinning. A lease is typically easier to obtain than a loan is, and you save the time and hassle of having to find a company that will extend you the needed credit. The terms of a lease agreement are usually more flexible as well.

Furthermore, you may qualify for a tax break when you lease equipment.

“If you use the leased asset in your business, you may enjoy a potential tax advantage because your lease or rental payments are fully deductible,” says the U.S. Small Business Administration website.

Room for Evaluation

With a lease, there is no long-term commitment, so if you decide after a while that a particular piece of equipment is not a good fit for you, or you don’t have a legitimate need for it, you are not out a huge investment.

Of course, leasing does have its disadvantages too. As mentioned, you may not need the equipment after a while, but you are obligated to continue to pay for as long as the lease runs. Also, you end up paying more in the long run.

“The lifetime cost of the asset is generally going to be higher than if you purchased it,” the U.S. SBA writes.

In general, however, there are a number of advantages, financial and otherwise, to leasing your tangible resources.

 

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