Equipment Financing: What It Means For Your Small Business
As a small business deciding whether to purchase or lease the equipment you need can be a big decision. There are a few reasons equipment financing could be a good choice for your equipment needs. Continue reading to learn a bit more about how leasing works, the risks involved, and why it may be a good choice for your company.
What is Financing
In many cases financing and leasing work in much the same way. A financing agreement allows you to borrow funds or make a lease in order to acquire equipment for your business. While a leasing agreement uses terms like lessor and lessee, financing agreements typically use the terms lender and borrower. Many leasing companies do offer options for equipment financing as well as leasing to allow you to use the equipment you need.
Financing Can Save You Money
Depending on your company needs you may find equipment financing can save you money. If you only need occasional use of a piece of equipment you may lose money purchasing it outright. Storing machinery year round can also be expensive. Equipment leasing companies also maintain their own machines and do their best to have the latest models available. By financing your equipment these are costs you shouldn’t have to stress over.
Determining Whether to Lease or Buy
There are a few things to consider when determining whether you want to lease or buy a piece of equipment. How often will you use it, how much does it cost, where will it be stored, how long will tn be in use, and will you make a profit are all good questions to consider. If the equipment will be used year round for most projects and will help your company profit, purchasing the equipment may be your best option. However, if you only need it short term or only for occasional or seasonal projects you may choose to lease.
Consider your company’s needs and which option is the best fit for those needs when making your decision. It may also be helpful to know that some leasing companies offer a lease to purchase option as well.
When considering whether to lease or buy look at the needs of your company and which option will be the best fit for you. Leasing may save you money on storage and maintenance, and give you the option to rent equipment for short term or seasonal project. Equipment financing can provide you with the funds needed to acquire the equipment you need.
