Whether you are operating a small business or a reputable, well-established one, purchasing new equipment – from computers to machinery and vehicles – becomes indispensable. But, what if, your company doesn’t have enough capital on hand to pay for that equipment? This is where, getting an equipment lease, proves to be a great financial option to ensure consistent business growth. It also helps a business stay competitive whilst utilizing the working capital and retaining cash flow.
Equipment leasing is nothing but the process of renting equipment from a vendor or a leasing company for a specified time. At the end of this period, the leaseholders are supposed to return the equipment, renew the lease or purchase the equipment.
However, not every equipment lease offers the same benefits to the business. There are a number of factors that should be taken into consideration when choosing a lease that best suits the needs of your business. These include:
Equipment Needs – If your business requirements technology equipment, then you might want to opt for a shorter lease term, to make sure you have the upgraded one when the new equipment arrives in the market. On the contrary, if you’re looking to lease office furniture, then a long term lease is the feasible option to reap maximum benefits out of it. That’s because furniture doesn’t need to be replaced more often. So, make sure you’ve determined your equipment needs thoroughly before choosing any equipment leasing company.
Equipment Leasing Company – When choosing any leasing company, you have to be certain that it has the required experience in your industry and specialize in the equipment that you are looking to lease. Moreover, it should be aware of the potential challenges that can impact your business in order to be able to serve you with the most suitable financial solutions.
Your Credit Score – Prior to applying for an equipment lease, you must review your business credit profile to avoid any inaccuracies or discrepancies. Make sure your payment history is accurate and eliminate all records from the accounts that are incorrectly reported. It is evident for leasing companies to know your personal loans, credit score along with the outstanding payments, to determine whether a lease should be extended to you or not. So, make sure you represent a successful borrowing or timely payment history to proceed ahead without any hassle.
Tax Benefits – Leasing business equipment also offers substantial tax advantages that can’t be gained when paying cash or making the investment through a traditional bank. So it is essential to consult the tax advisor and get acquainted with the full tax insinuations of leasing equipment for your business.
By following the above steps, you can obtain the right equipment lease in no time. The more you are informed about your business needs and the capabilities of a leasing company, the more it will help you to make the best equipment financing decision.
