5 Benefits of Using Equipment Leasing
No matter what kind of business you own, you likely need some kind of equipment to keep it running. For many companies, getting the funds for what you need can be difficult, especially if you are looking to purchase the equipment. Luckily, there is another option. The following are several reasons why you might want to consider equipment leasing instead.
1. It’s Easier to Upgrade
Some types of equipment will last for many years, but others will need to be replaced more often. With technology quickly evolving, it is possible that what is currently cutting edge equipment could become obsolete in a few years. If you purchase your equipment, replacing it can be more difficult. Leasing allows you to more easily replace or upgrade your equipment when needed.
2. It Can Be Deducted From Your Taxes
Equipment payments are deductible as a business expense and you can often deduct more when you are leasing. Over time, the value of purchased equipment depreciates so the amount you can deduct is lower, but your lease payments will likely stay about the same.
3. It Gives You More Flexibility
If you decide that you want to start doing things in a different way, you may no longer need your current equipment. If you are unable to sell it or the value has gone down a lot, you will lose money. Equipment leasing gives you the flexibility to change your company’s direction when you need to.
4. It Costs Less Up Front
Particularly for small businesses, spending a lot of money up front for equipment may not be an option. It can be difficult to get a loan, and the down payment needed might be outside of your budget. When you lease equipment, you only need to worry about your monthly payments.
5. It Makes Budgeting Simpler
When running a business, it is a good idea to stick to a monthly budget. However, there are plenty of things that can cause unexpected expenses. One of these is your equipment. Sometimes, your machinery may break, and this will likely occur more often as it begins to age. Maintenance and repairs can be costly, but if you are leasing the equipment, these costs are often included in your monthly payments.
While there are some situations when you may prefer to own the equipment you use, this is not always necessary. Equipment leasing is a great choice for many companies and can save you a lot of time, money and worry over the years.