There must be a reason small mom and pop shops and Fortune 500 companies use leasing to finance their equipment. It simply makes a lot of sense in our volatile economic situation.
The economy is improving, they tell us. The number of employed people is rising,and the unemployment is in a record low. But as a small business owner, you feel it’s not entirely true. There’s a disconnect between what the statistic says and what the street feels. Money is still tight, businesses struggle to make ends meet, and getting financing is still very hard. Hence – financing new equipment through leasing.
Here are the benefits of commercial equipment leasing:
Get 100% financing or Close to it – Unlike loans that require a substantial down payment, leasing comes with very little down payment, if at all. That is very important if your business is concerned about cash flow and you are “living on the edge”.
Keep Your Cash – When leasing you hold on to your cash and can use it in other areas of your business. Same goes with lines of credits.
Risk Management – Commercial equipment leasing helps mitigate the uncertainty of investing in an asset that your business needs but it will take a long time for it to reach the return on investment stage. Since you are paying as you go, the risk is smaller.
Certainty Against Inflation – Instead of paying all the costs of the equipment up front or with a large down payment, the monthly payments delay the outlay of funds. You can lock down the rates, and if there is a devaluation or inflation, it will not affect you.
Keep up to Date with Technology – Leasing allows you to work with the latest technology on your side. Leasing programs allow for an upgrade or replacement of leased equipment.
Lease Expertise – The commercial equipment financier can be a valued consultant, providing guidance that range from setting rates through asset management services. Some leases can track the status of the equipment, know when you should upgrade and provide installation and maintenance. Of course de-installation and disposal are usually part of the lease.
Product and Service Bundle – Certain leases allow for financing the entire cost of the equipment, the installation, maintenance, training, and software upgrades. Everything you need in one easy to manage package. Again, it frees much needed time and cash, and you know there is someone to take care of the problem.
The last Goodbye – Disposal of commercial equipment can be a big hassle, especially when the equipment has been modified to fit the needs of the business. Disposal, even in case of computers and other technology devices, can be cumbersome, if not costly. Why spend time and money to bring the equipment to resale value? Why pay fees for electronic disposals, which are regulated by federal, state and local authorities? Why worry about all that when the lessor handles removing and disposing of your commercial equipment?