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Business Equipment Lease - Tips on Business Equipment Leases

business equipment lease pros business equipment lease cons

If you are trying to decide whether to buy or lease equipment for your new business, sit down and make a list of pros and cons. Leasing versus buying can be a great option for some businesses. It all depends on individual circumstance. Figure out if a business equipment lease will eventually stack more dollars in the black or in the red column in your bank book.

business equipment lease pros

Cash flow. It’s all about the money. You can’t run a business if you spend all of your upfront cash buying the latest and greatest business equipment. On the other hand, employees need access to the best equipment to put out the best product. That’s when a business equipment lease makes sense. Most places don’t charge a down payment so you can quickly access the equipment needed for your office.

Tax breaks. The cost of any business equipment lease should be deductible as a job expense. In the long run the tax benefits can offset the expense of leasing business equipment.

Upgrades. If you are leasing business equipment it is much easier to upgrade to new models. The leasing company switches out machines for you. Upgrading equipment helps your business keep pace with the latest trends.

Flexibility. Leasing is usually more flexible when it comes to credit ratings. They already have the equipment as collateral and are more willing to take a security risk. Candidates with bad credit are more likely to get a business equipment lease than to get credit to buy new equipment.

business equipment lease cons

More expense. A business equipment lease is typically costlier than buying. The payments are spread out over a longer period of time causing a much bigger price tag.

It doesn’t below to you. Depending on the machine in question, you aren’t building up equity if you don’t own the equipment. Of course, that only applies if the investment pays off and the purchases equipment isn’t outdated. Purchasing also could mean even bigger tax advantages.

Lease fees. Some business equipment leases lock in rates for an extended period of time. If your circumstances change, you might be in the position to buy equipment sooner than expected. Most companies have large fees for terminating a lease contract.

After looking at the facts, decide the term that best suit your business. In any contract make sure you read the fine print. You can always ask for a customized contract that won’t penalize prepayment or charge for opting out of a lease agreement. Check with other professional for their advice and apply the information to your situation.

For many business owners a business equipment lease can be a big boost in starting a successful business.

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