Leasing equipment provides the lessee with all the following benefits
of utilizing the equipment without having to pay the up-front costs or
assuming the risk of ownership. A lease is one of the best ways for
businesses to stay on top of the development curve. With so many new
developments that occur (particularly in the technology areas)
equipment leasing is less financially expensive. Running a business
means making sound financial decisions that improve the condition and
quality of a business. Equipment leasing provides such a benefit along
with:
- Minimal Cash Outlay
- Overcoming Budgetary Limitations
- Avoidance of Obsolescence
- Flexibility in Terms and Equipment
- Conservation of the Business’ Working Capital
- Increased Opportunities
- Tax Benefits
- Fast Applications
- 100% Financing
The minimal cash outlay allows a business to conserve their own
capital. A lease also provides for servicing equipment failures. When
managing a large computer room, owning all the computer equipment would
place not only the upfront cost of purchasing the equipment, but also
maintenance and repair as needed. Businesses that conserve personal
business capital and lines of credit can handle the more mundane
day-to-day expenses and unexpected events.
Budgetary concerns over new equipment purchases can be circumvented
through equipment leasing. Operating budgets tend to be more flexible
than a capital budget. The lease terms can be as flexible as required
and are often negotiable on an individual basis. Lease terms are
usually much longer than a standard bank loan, which makes their
payment terms even better.
The ability to upgrade remains one of the best benefits of equipment
leasing. Businesses grow; technology changes and the needs of both can
change year to year. Equipment leasing allows businesses to benefit
from developments on both sides of the aisle. Lease terms may also be
structured to handle these changing situations.
Considering this multitude of benefits for equipment leasing, it’s not
surprising that more and more businesses are reaching out to lease
their equipment rather than purchase it. The benefits of leasing are
not limited to the computer industry or to large corporations. Small
businesses can benefit even more from equipment leasing than a large
corporation may.
In a contest of leasing versus buying, leasing wins most of the time.
Imagine the small business that houses only two employees. Their
working capital may afford a couple of PCs and some exterior accounts
to host a website. When a PC in the office goes down, if they are not
leasing they will need to replace the machine. In general, the cost of
replacing a standard PC is significantly lower than repairing one.
Small businesses need the ability to remain flexible, to upgrade and to
keep their machines in maintenance and up to date. Even more than their
corporate big brother, they need to know they will remain on the
cutting edge of the industry in order to make better business
decisions. A small construction company that has no access to certain
types of equipment will not be able to take on more challenging jobs.
The graphic’s designer that doesn’t have the equipment to support the
latest software will find himself or herself less competitive. An
accountant that doesn’t have the disk space to maintain growing
accounts will have to turn away business.
Leasing equipment makes sense on a variety of financial levels, but
also on levels addressing future growth. The business that takes
advantage of these benefits are planning two steps ahead of their own
niche market and will likely avoid being trumped by their competition.
So whether a business is large or small, thinking ahead provides them
with opportunity. What is the best benefit a business can receive from
leasing their equipment? Opportunity.
