Don't have the cash or desire to purchase the equipment outright? Here's what you need to know about equipment leasing. The acquisition of assets - particularly expensive capital equipment - is a major commitment for many businesses. How that acquisition is funded requires careful planning.
Purchasing equipment is expensive, and it may be impossible for many small businesses to buy everything they need upfront. Equipment leasing is a way to spread out the costs over a set amount of time. You may not own your equipment when you lease, but you don't have to worry about it becoming obsolete.
With equipment leasing, you pay a fixed rate for a specific period. The interest and fees are built in to the payment. Equipment leasing contracts typically run for three, seven or 10 years. Rather than pay for the asset outright using cash, it can often make sense for businesses to look for ways of spreading the cost of acquiring an asset, to coincide with the timing of the revenue generated by the business.
Equipment leasing is different from equipment financing – taking out a business loan to purchase the equipment and paying it off over a fixed term with the equipment as collateral. In that case, you own the equipment once you pay off the loan. With an equipment lease, the equipment is not yours to keep once the leasing term is over. As with a business loan, you pay interest and fees when leasing equipment, and they're added into the (usually) monthly payment. There may be extra fees for insurance, maintenance, repairs and related costs.
Benefits of equipment leasing:
Many lessors don't require a significant down payment. If you need to continually update equipment, leasing is a good option, because you aren't stuck with obsolete equipment.
If you need to upgrade to more advanced equipment to handle a higher volume of work, you can do so without having to sell your existing machinery and shop for replacements.
Equipment leases are often eligible for tax credits. Depending on the lease, you may be able to deduct your payments as a business expense by taking advantage of Qualified Financing.
Of course, not all equipment leases are the same, and there are lots of ways to finance a lease. If you're interested in leasing equipment for your business and you want to do so with a loan, we at Brantford encourage you to check out our review of the clients who has opted our services as the best for equipment loans.
Renting or leasing with Brantford will allow you to choose the fixture, furniture, Medical Equipments, IT Equipments, Plant & Machinery, Construction Equipment and many other assets of your choice to get the look you want, without having to spend money on buying it. At Brantford, we can provide you with every piece of furniture or fixture you may need for your office and business.
We also provide financing and leasing solutions for a wide range of productive and income generating non-CME assets comprising industrial and other assets. These include industrial assets, renewable energy assets and real estate assets. Lease varies depending on the asset or the business.
Brantford has been established in the year of 2019 as a premier independent wholesale credit institution leveraging the experience of global best practices and local economic development to meet the growing credit requirements of Indian corporate.
Comments
Post a Comment