A Detailed Overview of Equipment Leasing
Many businesses require a variety of equipment to run properly. Whether it’s for production or completing a service, the equipment you’ll need should have a significant spot in your budget and business plan. There are many reasons you may already be considering leasing. Buying equipment outright can be expensive, and could leave you with outdated technology several years later. Leasing often requires smaller payments and tax benefits. If equipment leasing seems like the right option for you and your company, here are some aspects for you to consider.
When deciding how to procure your equipment, do your research into your industry standards. How often does the equipment typically need to be replaced? How often do new and improved models hit the market? Leasing can be efficient for businesses in which technology regularly upgrades, as well as for short-term periods of use. If you want to use the equipment for several years, a loan could be the better solution. Before you can make the final decision, there are a few important steps to take.
Knowing your budget can be one of the best things you do for your business. Be aware of how much you can allocate to equipment as soon as possible, so you can further narrow down your options. For example, you may not have enough capital to buy equipment outright, or even put a down payment on a loan, but many equipment leasing agreements are still for large amounts. You could then add the payments into your monthly budget. If you have a need for more affordable equipment under the lease minimums, you may want to wait until you can purchase directly.
Does the equipment you need require regular maintenance? If you lease your equipment and run into issues, you could lose precious time and productivity waiting for repair approval. If you owned your own equipment, you’d have to pay the costs yourself, but you could also have them completed quickly. If you need any customizations to the equipment, you could run into more issues with leasing companies that want to keep their property within specific standards.
If you’ve decided to lease, research your options and fill out applications. Review time should be short so long as you’ve completed the forms correctly and provided any relevant financial information. If you’re approved, you can go over the payment terms. Make sure you understand all of the extra expenses you may be expected to take on, including fees and insurance. There’s a lot of information to go over, but you should be able to find the right equipment leasing provider for your company.