Without the right equipment, any business will struggle to provide its goods or services. That’s where equipment lease financing comes in. This financial tool makes it possible for businesses to obtain the equipment needed to operate. In essence, businesses borrow money from lenders to lease equipment. Along the way, businesses enjoy the following five benefits.
1. No More Replacement Costs
Certain types of equipment, like computers, may remain at the top of the line for only a couple of years. In other words, they become obsolete relatively quickly. With equipment lease financing, borrowers aren’t stuck purchasing equipment that will quickly fade from relevance. Borrowers can painlessly move on at the end of the lease.
2. Tax Deductions
The Section 179 tax deduction is available to companies that use equipment leasing. To learn more about this opportunity, which can dramatically cut down on your business’s taxes, click here.
3. Less Money Needed Upfront
Equipment can be quite expensive, making for a roadblock that many companies have difficulty surmounting. However, equipment lease financing drastically reduces the money needed upfront to begin using the equipment. For example, when starting out, a moving company may not have the money needed to purchase vehicles and moving gear outright, but leasing can put the company in a position to begin making money regardless.
4. Smoother Expenses
When compared with purchasing equipment, leasing makes for a smoother financial picture. With leasing, there will be no large upfront spike in expenses. Additionally, purchasing equipment puts the buyer on the hook for any repair costs in the future, which can be unpredictable and expensive.
Just as leasing eliminates the need to buy replacements for outdated equipment, it can also make your business more agile. For example, if your business shifts priorities and no longer needs a certain type of equipment at all, it can simply not renew the lease.
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