Another year is about to end and as the year 2012 comes in, many business owners will need to make important decisions for their companies. If you own a business, one question that you might need to consider is, “Should I lease business equipment?”
Leasing equipment presents many benefits but you should also be aware of some drawbacks. Listed below are some of the most important advantages leasing business equipment. Take a closer look at each and see how it applies to your own business.
Get access to the latest equipment. Having a small budget may limit your options if you’re going to purchase equipment. State-of-the-art or the newest models of equipment will obviously cost more than older versions. When you lease, you only need to make small monthly payments and you will have access to the latest and the best in the market.Equipment Leasing Benefits
Preserve your cash flow. Equipment leasing involves very minimal investment. Most leasing companies only require advance payment of one to two months and that’s all you need to pay when you apply for a lease. Thus, you can preserve your working capital for other expenses and keep your credit lines open for emergencies.
Keep up or stay ahead from competitors. It doesn’t matter if you are a small business or a new business. Through the help of your leasing partner, you can use technology to your advantage to make sure that you can keep up with the competition or even stay ahead of your competitors.
The process is easy and quick. Applying for a loan can be a real challenge especially if you own a new business or if you have credit problems. Most banks will not grant financing if you do not have credit history or if you have bad credit. Compared to loans, it is much easier to get approved for a lease and the process is quicker. For businesses with bad credit or no credit, they can seek out leasing firms that offer special lease programs that match the particular needs of their business.
Be safe from the threat of depreciation and obsolescence. Some types of equipment depreciate in value over time. There are also types of equipment that becomes outdated or obsolete after only a few years. Investing on these types of equipment by purchasing is a waste of financial resources – money that you can spend on other projects to enhance your business. On the contrary, leasing business equipment keeps you safe from the risk of depreciation and obsolescence because it will be easier for you to replace or upgrade equipment at a less cost.
Enjoy special tax privileges. Business owners who lease business equipment enjoy many tax benefits depending the type of lease acquired. To be sure that you are enjoying all tax benefits you are entitled to, consult a professional business accountant about your privileges as a lessee.