Equipment Leasing Explained
There is no limit to what small business owners can do, but sometimes they need some help to achieve their goals. Certain businesses can require expensive equipment that may be out of reach from a cost standpoint. Though it’s no secret that there are alternate ways to acquire said equipment, some options are less obvious.
Instead of purchasing expensive equipment, business owners can look at Equipment Leasing. An equipment lease allows you to use equipment over a set amount of time in exchange for consistent payments, not unlike a lease for any other vehicle you’d buy for your own personal use. In some instances, once the lease is up, you can even spend the rest to purchase it if you feel like it would benefit your business (and your cash flow) more.
Those who might be afraid of high costs, even in leasing, can find solace in the fact that they can lease both new and pre-used equipment. New equipment loans might be more expensive and risky, but you’ll be sure that there aren’t any pains inherited from the previous owners. Used equipment loans might be better suited for someone who just needs their equipment to work without any of the bells and whistles a new piece of equipment might hold.
Like leasing a private vehicle, there are pros and cons to equipment leasing. Some might be enticed by the fact that it’s easier to qualify for an equipment loan over a purchase or that it could offer a more flexible payment plan. It’s also worth noting that a lease might not necessarily require a down payment. Also, should you ever want to upgrade said equipment, it could be negotiated to exchange the currently-leaded piece of equipment for a new one with some updated terms.
Of course, there are some downsides as well. In the long run, an equipment lease could wind up costing more than a purchase, and you could be faced with making payments on your lease even if you no longer require the equipment you purchased.
Despite the cons, equipment leasing could very well be the perfect solution for a small business owner looking to make major upgrades, all without needing to break the bank for something that may become obsolete within a few years. Service Capital can help you figure out your best options so give us a call if you’re looking at leasing any new or used equipment!
