Whatever business you have, you certainly need professional equipment, office furniture, devices, vehicles, tools or machinery. If you own a small start-up business, you may have problems with funding your business and financing your first projects. You do not have enough money to buy expensive equipment. It would be best if you leased the equipment you need. Lots of successful businesses choose this option instead of spending a fortune on a purchase.
Benefits of Equipment Leasing
If you have a start-up company, you should consider the advantages of equipment leasing.
It costs less than buying equipment
Initially, leasing equipment costs much less than buying the things you need. It might help a lot that you do not have to pay the full costs at the beginning.
If you lease equipment, you will not have to seek a person who is willing to extend your credit to make purchases.
You can upgrade your equipment easier
Once your lease expires, you can lease higher quality, state of the art equipment from another lessor. On the other hand, if you buy your equipment, you will not have enough money to update it for a good while. Short-term leases are flexible. You can always keep an eye on leasing options. You may find an updated version of the equipment you are using, a new technology or a less expensive leasing alternative. Technology is a rapidly changing field, so new, high tech options may appear on the market in a couple of months.
You do not have to take care of maintenance costs
In some cases, your lease includes maintenance. The lessor takes responsibility for any issues that may occur while you use their equipment, so they will pay the costs of maintenance like labor costs or purchasing new parts.
Tax benefits: you can deduct rental payments on your taxes
If you use rental equipment in your business, you can deduct the full cost of lease payments from your taxable income.
Moreover, if your lease lasts five years – in some cases, it should be seven years –, you can claim the costs as capital allowances.
Lease payments might be part of your purchase
In some cases, rental payments that you have already paid can add up to the original price of the equipment. If you buy it at last, it will cost somewhat less.
Probably the lessor will offer a deferred payment lease option. It means that they are willing to wait for 60, 90 or 120 days for your initial lease payments.