7 Reasons to Consider Equipment Leasing
In some circumstances, it makes sense to purchase your own business equipment. In many cases, a business owner should consider equipment leasing as a smart and viable alternative to purchasing. How do you know if leasing your equipment is the right decision for your business? Review these seven solid reasons to consider this option.
1. Lack of Upfront Capital
Every business needs some type of equipment to function, whether it’s computers or heavy machinery. Commercial grade equipment comes with a price, and sometimes businesses simply lack the capital to pay outright for these items. If you are planning to make payments anyway, the lower cost of renting instead of buying can make financial sense.
2. Upgrade to the Latest Technology
Many businesses want to use the latest and most technologically advanced options available, but purchasing all new equipment every two or three years is not always financially sound. An expiring lease gives you the opportunity to continuously experience the newest technology.
3. Make Better Use of Your Funds
Even if a business has the working capital to purchase new equipment, it often makes sense to lease equipment and use the savings on more pressing areas of the business.
4. Equipment Is Needed Short-Term
If the equipment you are considering purchasing will not be needed continuously or long-term, it may not make sense to make the expensive purchase. Equipment leasing for a set time period also saves you the hassle of selling the items you don’t need later.
5. Benefit From Set Terms
Unlike bank loans, which are frequently set up with variable rates, the terms of an equipment rental should remain the same for the life the lease. This fixed-rate provides rate stability that loans sometimes cannot.
6. Unload Outdated Equipment
Many leasing contracts come with the ability to trade in or dispose of old, outdated items. This can lead to a discount on your rental or at the very least the avoidance of hefty disposal fees.
7. No Maintenance Worries
Over time, your purchased equipment will need maintenance and repairs. Leased items also need regular maintenance, but the cost of maintaining them is typically included in the contract. This means you don’t have to worry about out-of-warranty repairs or expensive servicing costs.
Although it might make financial sense to purchase your own business equipment, you should consider equipment leasing as an alternative if you prefer the latest technology, want lower payments or plan to use the equipment for a shorter period of time.