The primary purpose of equipment leasing is to enable you to rent equipment form leading company or vendor for a particular period of time. At the end of the lease, you need to return back the equipment, or buy the equipment or renew the lease. However, it is quite important for you as business owners to determine whether this solution is the right match for your business requirements. Thus, let’s explore situations when equipment leasing is an ideal option for you-
- You have to stay up-to-date about the latest technology
Instead of purchasing the equipment, leasing allows you to change out your equipment on a regular basis. There is no doubt that it is impractical for some firms to purchase new equipment once or twice a year, leasing will generally allow them to equip their company with the latest machinery or hardware. Thus, if you are looking for medical or electronic equipment, then the lease can be the ultimate option for your business.
- You have to spend capital in other important areas
No doubt, it is not always the right time to spend lots of money enhancing equipment for your business. If your business has other more important cash requirements, then leasing equipment allows you to push that cash you would spend on upgradation of equipment towards another, more important area of your company.
- You don’t have enough capital to buy the large equipment
As most equipment leases have low down payments and leasing is quite the best option for those business owners who don’t have enough cash to purchase their new equipment outright. In addition to it, lease payments are generally remarkably lower than payments done on monthly associated with a business loan or credit line.
- You want to sell old equipment
If you are seeking the enhancement for your existing equipment, but don’t have enough inclination or time to sell it, then a lease makes a reasonable option. A lot of equipment leases will provide a credit on old-trade INS. Thus, it saves your time and helps you to find a buyer for your outdated equipment.
- You would like to take advantage of tax incentives
Leasing equipment offers some decent built-in financial benefits – tax credits. In other words, leasing is entirely tax deductible under Section 179. The maximum tax deduction on annual basis is set at $1 million, currently.
- You don’t have any plan to keep the equipment for long
If you are planning to keep the equipment for a long duration, securing or purchasing a loan is an ideal option for you. But, if you don’t want the equipment for long, then it makes reasonable to lease it.
If your current situation matches with any of above-mentioned scenarios, then equipment leasing is surely the right solution for you.