Equipment Leasing, Commercial Lending, Comprehensive Consulting

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When Does Equipment Leasing Make Sense?

 

Equipment leasing and financing makes sense for most small businesses in America.   Many businesses don’t know or understand the benefits.  Nearly any type of equipment in any industry can be leased.  Some interesting facts:

  • 82% of all companies lease equipment
  • 91% of those companies that lease will lease again at some point
  • 80% of companies feel that leasing is the best means for acquiring equipment

There are several advantages to leasing equipment:

  • There is Less Expense up-front with leasing because you have easy, predictable payments.  You don’t have to deal with one large lump sum to purchase what you need, therefore making it easier to budget for the equipment over a longer period of time.  And many leases provide for 100% financing.  Thus leaving available working capital at your disposal.
  • Preserves Working Capital.  The primary advantage of leasing business equipment is that it allows you to acquire assets with minimal initial expenditures. Because equipment leases rarely require a down payment, you can obtain the goods you need without significantly affecting your cash flow.
  • Tax deductible. Lease payments can usually be deducted as business expenses on your tax return, reducing the net cost of your lease.
  • Flexible terms. Leases are usually easier to obtain and have more flexible terms than loans for buying equipment. This can be a significant advantage if you have bad credit or need to negotiate a longer payment plan to lower your costs.
  • Easier to upgrade equipment. Leasing allows businesses to address the problem of obsolescence. If you use your lease to obtain items that may be outdated in a short period of time, such as computers or other high-tech equipment, a lease passes the burden of obsolescence onto the lessor. You are free to lease new, higher-end equipment after your lease expires.
  • Update Technology.  Leasing is better for equipment that needs to be updated often because you can acquire updated technology easier and quicker. If you will need to update your equipment on an annual basis to remain competitive, leasing allows you to avoid being stuck with outdated equipment.

If your company does not have adequate funds, if you don’t have the credit to purchase and finance equipment and if your company uses it’s equipment heavily then you should look into leasing.  Improved cash flow, off balance sheet financing and many other benefits exist for those companies that have been in business for years or just for start ups.

Cardinal Business Financing Inc. will work with you to make sure we provide you with the best term, rate and proper lease structure that suits your businesses needs.  Please call us at (866) 578-5999 x101 to discuss your next equipment acquisition, or fill out our Contact Us form.