Why Is Equipment Leasing Popular Businesses?
There are a lot of reasons why companies choose to lease a needed equipment. Equipment leasing offers business protection and flexibility against technological obsolescence, as well as, allows them to enhance revenue production and cash flow through the utilization of the leased material. Aside from these, choosing to lease saves you from long bank loan application queues and valuable working capital.
Here are the most common reasons why companies lease important business equipment:
- Purchasing Power: Financing equipment leasing allows the company to acquire equipment of higher quality, as many as required.
- 100% Lease Financing: With leasing, no down payment is required. The lease term could be matched with the maximum life of the equipment to be leased.
- Balance Sheet Management: There are specific kinds of lease that help the lessee manage the balance sheet better, as well as, enhance the overall financial picture through conserving some considerable amount of the operating capital. A lease, also, frees a company from the much needed working capital and bank credit lines, especially on expenses with regards to emergencies, expansion, and inventory.
- Asset Management: A lease option offers equipment utilization for a pre-specified amount of time under a fixed payment rate. It manages and assumes the risks of ownership. At the end of the agreed time period, the lessor, almost always, chooses to dispose the equipment.
- Tax Treatment: Leasing provides the option of taking away 100% of the supposed equipment purchasing expense from the business’ overall expenses.
- Service Additions: Numerous lessees prefer to restructure their lease agreement so as to include other services like maintenance, installation, and repair works.
- Upgraded Technology: When companies lease, they are given the ability to keep up with technology. The lessee could add equipment or upgrade the existing one in order to meet the office’s changing needs.
- Flexibility: There is a wide range of available leasing products, which means that the lessee could personalize a contract in a way that better meets the business’ requirements and needs like cyclical fluctuations, transaction structure, budget, and cash flow.
- Specialized Assistance: A lessor is a specialist in the industry of equipment financing and leasing, as well as, fully understands how the capital equipment market operates.
- Reliable Financing-Equipment Option: More than 30% of the entire capital equipment in the US went through leasing. In fact, out of 10 companies eight of them choose to lease their equipment.
Equipment leasing has become a popular method of keeping equipment and technology up to date. Since most leases don’t require a large amount as down payment, leasing gives a business the ability to hold on to cash and invest in other vital operational areas. There are leasing options that allow equipment trade- an option that makes leasing appealing to businesses that have obsolete equipment models.
Simply, business equipment leasing is convenient, efficient, and works well with a 100% financing option.