The Benefits of Using Equipment Leasing
When you need new equipment to run your business, you don’t necessarily have to buy it. You can lease all sorts of business tools, machinery, vehicles and equipment.
Business equipment leasing gives you the right to use the property for the period of the lease, in exchange for (typically) monthly payments. In contrast to a purchase loan, at the end of your lease, you don’t own the property. When the lease ends, you simply return the equipment, if it’s no longer needed–or choose another option that benefits your business.
Major Advantages of Equipment Leasing
- No money down: If you’ve ever leased a personal vehicle, you might have paid a certain amount up front, due at lease signing. With equipment leases, this may not be necessary, meaning you can use your cash to further your business, without tying it up in equipment.
- No collateral typically needed: You can avoid risking your personal belongings or business assets in exchange for the use of business equipment.
- No-hassle application: An equipment lease application requires much less “paperwork” than a home mortgage or standard business loan.
- No great credit, no problem: Your lenders may not require a high credit score for a business equipment lease.
- Many end-of-lease options: As mentioned in the intro, typical equipment leases offer you choices to suit your business needs.
How to End a Business Equipment Lease
Choose an option that works best for your future business needs and tax situation. You could:
- Continue your lease. If the equipment is still of use to you, and you don’t want/need to buy it outright, you can generally continue under similar lease terms.
- Buy the equipment at current value. You have just completed a rent-to-own type of arrangement, which works well if you still need the tools or equipment.
- Trade in the business equipment. Now, you’re free to lease or purchase new, updated equipment.
- Return the equipment. This option saves you the cost and inconvenience of storing, or arranging to sell, equipment that you only needed to use temporarily, during the lease period.
To learn how equipment leasing could benefit your business, contact ASA Capital Funding today.