Equipment Leasing: The Upside of Leasing for your Business
When your business needs additional (or new) computers, vehicles or tools, you don’t need to tie up your cash with purchases or use your credit line. Consider the advantages of equipment leasing instead.
What is Business Equipment Leasing?
In a lease, the lender owns the tools, cars, or equipment and rents it to you, for use by your business. You pay a monthly lease payment for an agreed-upon time period. When the lease is up, your business could opt to buy the equipment at a pre-agreed amount or at current market value. You could also continue leasing the same items, lease new business equipment instead, or return the equipment to the lender.
Equipment Leasing Benefits
With an equipment lease, you can:
• Obtain necessary equipment to conduct (or expand) your business, without the need to pay up front.
• Use the positive cash flow. You are free to use your cash for other business needs, not for equipment purchase.
• Arrange for no down payment. You may qualify for 100% financing.
• Keep your lines of credit fully available, since they’re not needed when leasing,
• Get tax deductions. You may be able to deduct lease payments as a business expense on your taxes. (Consult a tax expert for business tax advice.)
• Enjoy hassle-free upgrades, so you can always have the latest, cutting-edge tools of your trade.
• Negotiate terms to fit your needs, such as amount of insurance, who pays for repairs, how long the lease extends and more.
• Consistent interest rate. Your lease rate is typically fixed for the whole term.
• Enhance your balance sheet. Lease payments may count as business expenses, instead of long-term debts. (Consult your accountant or tax advisor about your specific situation.)
• Enjoy positive ROI. Even prior to your first equipment lease payment, your leased tools help you earn money.
With all the advantages of leased equipment, it’s wise to consider this arrangement for your business. Learn more about business equipment leasing — contact Muth Capital today.