What is Equipment Leasing?

Does your company use a lot of different types of equipment? Is the kind of equipment you use subject to frequent updates or new model releases that improve performance? You may be interested to find out what an equipment leasing financing option has to offer you.

Leasing is very similar to a rental agreement in that you are paying to use this equipment for a set period of time. Some lease options allow a lease-to-own situation whereas others indicate that the lease agreement must end after a certain period of time. Some customers may prefer that their lease agreement ends at a certain point because by that time, the manufacturer may have already released a newer version of that equipment. Others do want to buy the equipment after a set period of time, and the leasing option allows them this opportunity. For these reasons, equipment leasing works really well for a lot of different business needs.

Flexible Rental Agreement

One major benefit to leasing is their flexible rental agreements, depending on what your company needs. So, for example, if a company needs a piece of equipment for a very specific project that will only take three months to complete, that company can lease their equipment for that length of time and then be finished with the lease when they’re done. If a company would prefer to lease it for a longer amount of time, they have a financing option available for that that would include smaller payments and a more fixed rate, depending on what the customer needs.

How It Works

You can finance your equipment in several different ways. Either you can base it on your company’s equity or you can treat it like a debt. Equity-based leases are good for companies who don’t want to pay a big upfront cost to borrow the equipment. If your company’s equity is not quite where you need it to be, you can always go with a debt-based option. Debt financing is treated as a liability on your business record, but may still be a good solution for your business if you would prefer not to lock up your cash flow over equipment that you need.

To sum up, equipment leasing has a lot of attractive benefits for companies looking to conserve their cash flow and have a flexible way to finance their necessary equipment. If you think leasing may be right for your business, find out more today about equipment lenders in your area.