Equipment Leasing: What you need to Know
When starting your business, it is likely you will encounter several problems. One of these can include unexpected equipment costs, which may be more expensive than what you initially assumed. When materials and machinery are unaffordable, one option you can consider is leasing office equipment.
What is Equipment Leasing?
Equipment leasing is a type of financing in which the owner and a lessee sign a contractual agreement for the latter to rent equipment for a period of time. Often, the lessee may return, renew their contract, or purchase the equipment as soon as their contract ends.
You might have heard of equipment financing, but this is different from leasing. While leasing allows you to rent equipment, financing is where you take a business loan to buy your equipment and paying it off over a fixed term. Your purchased assets remain your property after you finish paying the loan.
When should I Lease Equipment?
Businesses lease equipment for various reasons. Most of the time, it is because of budget issues. But for some companies, they lease equipment when:
- They are start-ups and can’t afford to purchase yet
- They can’t catch up to upgrades
- They want to scale their businesses
- They do not want to spend on maintenance costs
What are the Benefits of Leasing Equipment?
Cut Costs when getting Started
As a startup, some equipment may be too expensive to purchase. Fortunately, most lessors do not ask for significant down payment to lend you the fixed assets you need. For instance, restaurant equipment leasing can help you obtain kitchen machinery and tools out of your budget.
Obtain the Latest Upgrades
When you purchase your fixed assets, you might get stuck with them since upgrading means additional expenses. Leasing companies ensure they obtain the latest equipment to lend to their clients, giving you access to what’s new on the market.
Save on Maintenance
Overtime, equipment may sustain damage as you continue to use them. Sending away them away for repairs and maintenance not only takes a chunk of your budget, but they may also waste time especially when those fixed assets are vital to operations. On the other hand, costs related to maintenance and repair are not shouldered by the business, but rather by the lessor.
Often, leased equipment are eligible for tax credits. You may be able to deduct payments for business expense depending on the lease.
Looking for a reliable leasing company to rent some equipment? Get in touch with Noreast Capital at their website https://www.noreastcapital.com/ or call 410-268-5588 for more information.