EQUIPMENT FINANCING & LEASING

Another way to keep equipment costs down is to lease instead of buy. These days, just about anything can be leased–from computers and heavy machinery to complete offices. The kind of business you’re in and the type of equipment you’re considering are major factors in determining whether to lease or buy. If you’re just starting out and only need one computer, for instance, it probably makes more sense to buy. On the other hand, if you’re opening an office that will have several employees and require a dozen computers, you may want to look into leasing.

According to the Equipment Leasing Association of America, approximately 80 percent of U.S. companies lease some or all of their equipment, and there are some thousands of equipment-leasing firms nationwide catering to that demand.

Leasing advantages include: making lower monthly payments than you’d have with a loan, getting a fixed financing rate instead of a floating rate, benefiting from tax advantages, conserving working capital and avoiding cash-devouring down payments, and gaining immediate access to the most up-to-date business tools. The equipment also shows up on your income statement as a lease expense rather than a purchase. If you purchase it, your balance sheet becomes less liquid.

Leasing also has its downside, however: You may pay a higher price over the long term. Another drawback is that leasing commits you to retaining a piece of equipment for a certain time period, which can be problematic if your business is in flux.

Every lease decision is unique, so it’s important to study the lease agreement carefully. Compare the costs of leasing to the current interest rate, examining the terms to see if they’re favorable. What is the lease costing you? What are your savings? Compare those numbers to the cost of purchasing the same piece of equipment, and you’ll quickly see which is the more profitable route.

Fill out to the form to the right and a financing specialist will contact you to discuss your specific needs. If you are ready to apply right now, you can provide your complete information on our detailed application form.

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