How Your Startup Business Can Take Advantage of the Tax Benefits of Equipment Leasing

equipment leasing saves you money on your taxes

There are many reasons why businesses use equipment leasing to finance their business.  In the past, this form of financing was not as well known as it is now. When I would talk to clients about their equipment financing options, many had never even heard of equipment leasing!

Some common myths about equipment leasing:

Myth: Equipment leasing is only open to well-established businesses.

Fact: Equipment leasing is open to ALL kinds of businesses.  From startup to well established.

Myth: Equipment leasing requires the business owner to have good personal credit.

Fact: Equipment leasing is extremely flexible.  Unlike an SBA loan where you need a minimum credit score of 620. With equipment leasing, you can have a very low credit score.  We have financed clients scoring it the low 500s!

equipment leasing helps finance startup businesses!Myth: If you lease your equipment you won’t “own” it.

Fact: There are many types of equipment leases and you can do a lease to own if that is what you want to do.  Some of our equipment lease programs are structured in such a way that at the end of the lease term you pay $1 and the equipment is yours.

But another benefit to leasing is if the equipment has become obsolete, or you need to upgrade to one that has more features, you can structure your lease so you give it back at the end of the term and you can easily get a new piece of equipment.

Why is equipment leasing such a good option for start up businesses?

Equipment Leasing Saves your working capital 

equipment leasing preserves working capitalEquipment leasing is great for startups trying to preserve their working capital. Let’s face it.  Buying equipment is expensive.  For many new businesses, it requires that the spend more than 1/2 their operating capital to get the equipment they need.

But with equipment leasing, they can get the equipment they need while only paying first, last payment and processing fees. A small fraction of the cost the cost of the equipment.

 Equipment Leasing Has An Easy Approval Process

Whenever a new business opens their doors, the goal is to do so as quickly and cost-effectively as possible.  With equipment leasing, a typical lease transaction can get approved and funded within a few days of the application being filed with the leasing company. Sometimes (based on the dollar amount of the lease) it can be just a few hours!

Equipment leasing also has extremely flexible credit requirements. Depending on the equipment leasing company you use, you will find that business owners with A – D credit can be approved for an equipment lease.

Equipment Leasing Can Save You Money On Your Taxesequipment leasing saves you money on your taxes

There are huge tax advantages for startup businesses that choose to lease their equipment One being that you can actually deduct lease payments for your taxes. There are tax breaks available for most types of equipment leases.

Whether you are going to be returning the equipment at the end of the lease period or purchasing it in full, you will still be able to deduct all of the lease payments that you made during the process.  You can read more about the tax benefits of equipment leasing here, Make sure you talk to your tax advisor to make sure you get all the tax benefits you are entitled to!

Read more about our Equipment Leasing Programs For Start Up Businesses by clicking here.


Ready to apply for your own startup business equipment lease? Click here!apply for your equipment lease

Article updated 12/4/18 by L. Roberts

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Not only does equipment leasing provide financing for startup businesses, but it can save you a lot of money on your taxes! Click here to learn more!

7 thoughts on “How Your Startup Business Can Take Advantage of the Tax Benefits of Equipment Leasing

  1. Wow! Great advice and I can’t tell you how happy I am to have found this site. I’ll tell you, getting start-up financing is tough! I have excellent credit as do my partners but the banks kept saying NO! Maybe it’s our age? I dunno. But Lease Funders came to our rescue and now it looks like our new regional fashion magazine is going to happen! YES! You sold us on leasing our printing equipment but thanks so much for letting us know the tax benefits. You rock!

  2. Ya know, when my dad announced he was starting his own local courier service, the family had our doubts – until we saw his plan and it looked great on paper. The only issues were getting a loan approval and then financing the vans needed. Banks kept saying NO (after all, who wants to compete with UPS?) But leasefunders said YES and even showed him how leasing the vans could help him on his taxes. BTW, I work in dispatch with his company now. People in town sure do like those same day 100 mile radius deliveries!

  3. Stephanie: These things are not anymore new. We often hear about how banks aren’t approving loans made by some of our clients. This is why a lot of them are surprised by how easy it is to get financing from us.

    Kim: Our requirements are not as hard to achieve as those from banks. And that most of our customers get approved and are given the amount they need for their business.

  4. So while the equipment leasing process can be tricky and quite risky as well, I guess it does give you some big perks as long as you can work out a reasonable deal. I’m still debating whether or not I should be leasing the equipment we need, but the truth is we could really use the extra fund. The tax benefits to equipment leasing has made things a lot more enticing, that’s for sure.

  5. It is normal to have doubts especially when it involves money. But I’m proud to say that we have helped a lot of business owners already. They took the risk with us and we helped them start a business and stay in business. We even have repeat customers who got financing from us many times over.

  6. This would be a great way for small companies to get the most bang for their money. Get the equipment you need, have more money available, and be able to deduct the lease fee as losses. It’s no wonder why only large businesses used to have this perk, every piece of the law is written to benefit the big dogs anyways. In any case, I’m fairly certain my business partner will say okay to leasing equipment, once he hears this news from me.

  7. Hi Andrew, heard from Mark today. I look forward to working with the 2 of you on your lease. Sorry for the problem we were having with the fax, its fixed now. Its on 24 hours a day 1-888-226-0021 (fax). If you need to reach me feel free to call at 888-308-7160


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