Seven Benefits of Equipment Leasing
100% Financing with a Lease
Unlike requirements of most traditional lenders, you may be able to arrange 100 percent financing of equipment with no down payment. This is key if cash flow is a concern to your business.
Equipment financing is a source of funding that lets you hold onto your cash, or working capital, so it can be used for other areas of your business, such as expansion, improvements, marketing or R&D.
Equipment financing can help mitigate the uncertainty of investing in a capital asset your business needs until it achieves a desired return, increases efficiency, saves costs or meets other business objectives.
Equipment financing may hedge inflation risk because instead of paying the total cost of equipment up front or with a large down payment in todays dollars, the stream of payments delays your outlay of funds. In addition, either a lease or loan can lock in the rates that exist on the date of the closing. In other words, the finance company absorbs the devaluation of your payments over time due to inflation and other financial risks.
Financing equipment helps maintain cash flow and greater certainty in budgeting by setting customized rent payments to match cash flow and even seasonal cash flows.
Leasing, loans or other financing often enables you to acquire more and better equipment than you could have without financing. Certain leasing finance programs can also allow for technology upgrades and/or replacements within the term of the lease contract.
Tax-oriented leases should produce lower rents since the lessor retains title and depreciation. A tax-oriented lease is a transaction that includes the value of tax benefits. Conversely a conditional sale or loan enhances tax benefits of higher deductions to the lessee/borrower.