You don’t want to over stretch your business credit. One way to solve this problem is through the use of office equipment leasing.
There are many advantages of office equipment leasing. This article will look at the advantages of using this method as opposed to purchasing equipment outright.
– Leasing allows you to afford more of what you need for the business because it helps to improve your cash flow. Purchasing equipment usually requires some sort of financing through loans or saved cash. Purchasing also requires a down payment while leasing does not.
As businesses start up it’s difficult to be able to purchase all of the equipment you need to get going. You might not be able to afford the copy machine, fax, phones, and chairs you need, but through leasing you can put it all together in a payment that you can manage. In addition, it provides your business with a more professional image and can improve and boost employee morale and productivity.
– Leases are easier to finance than purchases. Most lenders will require a history of several years before deciding upon lending finances. Leasing institutions usually require only a few months of financial history before deciding upon leasing decisions. The collateral for leasing equipment is usually the equipment itself. In that sense, recuperation is much easier because the equipment can be reclaimed without much loss.
– Leasing allows you to take advantage of new technology. We all know that technology is constantly changing and improving. By leasing you are able to upgrade machinery and have access to technicians for minimal costs. Leasing also allows you to try out different types of options before a purchase decision is made.
– Leasing offers tax advantages as well as advantages to your balance sheet.
This can help to improve your financial indicators. Accounting rules require that certain lease agreements must be reported and other do not.
If you do decide that leasing is a viable option for you, keep in mind to keep your lease agreements in shorter time frames. Try to negotiate substitution clauses allowing you to change out equipment. Insist upon a cancellation clause that allows you to cancel services for a minimal fee or penalty. If you think that purchasing the equipment might be a futuristic plan, build that into your contract. Some companies have lease purchase options available to many clients who wish to utilize this option.