Getting the best and newest equipment for your company can help you keep up with the competition by providing excellent products and services to your company. These pieces can be expensive, however, and buying them outright can pose risks as well as depleting your reserves. Equipment leasing, on the other hand, can improve your cash flow, help you avoid inflation, and make upgrades easier all while offering you better payment and term flexibility.
Improved Cash Flow
Tying up your working capital and cash flow in down payment and monthly loan installments can make it harder to pay other bills or take on large projects for quite some time after equipment purchases. When you work with the manufacturer or third-party companies to lease the units you need, you can make a smaller down payment as well as lower monthly installments during the lease. This can keep the cash flowing as you get the new equipment and add to your productivity.
Forces in the market can lead to inflation, which means that the amount of money you have on hand can be devalued over time. For equipment purchases, this means your investment loses value due to higher interest rates on a loan as well as units becoming obsolete or broken. When you lease equipment, these risks are absorbed by the owner instead of by you.
Upgrades and Short-Term Use
Sometimes you need expensive equipment for short-term projects, or a newer model is released before your loan has been paid off. If you purchase equipment, then you need a way to store or get rid of it when it is not in use or becomes obsolete. Leasing contracts will account for these situations with flexible terms and sometimes the option to trade equipment in for newer models at the end of the lease.
Because there are many places to get a lease on equipment, you can compare payment options between them to find the best one for you. Some will even have no down payment required, let your trade-in older equipment for a down payment, and much more.
Equipment leasing can be a good way to get the items you need to do the work without having to save up the capital or deplete your resources. By leasing seasonal items or equipment which is frequently upgraded, you can have more flexibility in trading it in for newer models as well as avoid storage fees.