The thought of ownership may seem attractive but depending on your situation, it may serve your bottom line better if you can resist that urge and lease the equipment you need instead. Leasing equipment instead of purchasing it can free up capital which can then be used in other ways to help your business grow.
Whether you need construction, office or software equipment, leasing is a benefit for your business because of the flexibility it allows.
Benefits of leasing equipment for your business include lower up-front costs and less restriction of your company’s growth potential by using equipment that will likely become obsolete. This is because business owners will often overlook the long-term maintenance costs once their warranty expires. This can be thousands of dollars, and with a well-structured lease, you won’t ever have to worry about that because your equipment will be under warranty.
Imagine having the capital needed to update your equipment when a lease expires, allowing you the flexibility to stay current with equipment and technology, instead of being stuck with an obsolete tool you can’t afford to replace.
Your business will also benefit from leasing equipment because you will be able to better anticipate your monthly expenses, providing cost certainty and confidence that will enable you to make better-informed decisions when considering long-term business growth.
Another leasing benefit for businesses is leased equipment—when set up correctly on a balance sheet—doesn’t need to be disclosed as a liability. This can help increase your credit line or get credit with a bank since the leased equipment is treated as an operating expense rather than debt.
Another leasing benefit for businesses that often creates a financial advantage comes from eligible tax benefits. Oftentimes, a business can get a full deduction of lease payments against their current earnings, increasing capital to help your business grow.
The benefits of leasing equipment for your business are substantial. By leasing, you are able to make predictable and consistent payments. You also have the opportunity to return the equipment and you’re also able to stay current with your equipment, which helps boost productivity and company growth. These key benefits will help enable your business to be more nimble and agile. There are times, however, when it may be practical to purchase instead of leasing. If your equipment needs are simple, and you have the capital and an excellent credit score, purchasing may be a good way to go. How long you predict you will need the equipment should also be a factor in making a determination.
The experts at KLC Financial can help determine your business needs and preserve your working capital, helping you get the equipment you need. Whether leasing or financing, contact us today to get our expertise.
If you would like to have one of our Sales Representatives contact you and discuss what financing options are best for you and your business please fill out this form and someone will be in contact with you shortly.