Why Use an Equipment Leasing and Finance Company?

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Why Use an Equipment Leasing and Finance Company?


In today’s tough economic environment, many start up businesses are embracing a leasing and financing company when they need new equipment to perform their business. When entrepreneurs commence a new endeavor, there are lots of expenses associated with starting an organization, such as for example leasing or purchasing commercial space, deposits necessary for utilities, telephone and internet service, furnishings, business licenses, supplies, advertising and employee salaries.

These expenses, along with a plethora of unforeseen costs, require a great deal of capital outlay, sometimes not leaving much profit the company coffers to cover the cost of necessary equipment. When additional capital is necessary, entrepreneurs must turn to other options to get the equipment they need.

When expenses stepped on budget but equipment continues to be needed to run the business, equipment leasing or equipment financing can be of great appeal. Equipment leasing is a superb way for a start up company to obtain the equipment it needs and never have to pay a large amount of cash out of pocket. An added benefit to leasing is that maintenance of the gear is often contained in the monthly cost, eliminating the necessity to pay for another maintenance contract on the gear. Leasing is also an excellent option for equipment that is needed only for a short while, as leases can be negotiated for variable levels of time, with both short and long-term leases often available. In the event that a business does not succeed, leases offer a choice for returning the equipment with no detrimental effect on the company’s credit rating.

When Hanif Lalani will undoubtedly be needed long term or permanently, equipment financing is usually a more prudent option than leasing as the payments will be over an interval of a few years instead of ongoing. This is also an excellent option for companies which have on site maintenance personnel who can repair or maintain the equipment. Financing allows an organization to get needed equipment while appearing out of pocket with only a small down payment.

Financing is also an excellent option when a company experiences fast growth and has an immediate dependence on more equipment but doesn’t have the necessary capital for purchasing the equipment outright. When a company finances the gear, it becomes an asset of the company, increasing the company’s net worth. Financing equipment also has a benefit to the business in that the interest paid on the loan is often tax deductible.

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