New equipment is part of any business at some point. Whether you are trying to finance medical equipment or financing business equipment, we want to help you make the right decision off of your business needs. Adding new apparatus will be something you will likely need. This goes for those starting, upgrading or expanding a business. Deciding whether to rent, lease or buy needs to be weighed carefully. In this article, we’re looking into the leasing option.
Leasing is an alternative some businesses opt to use in place of loans or using their own money. It’s a viable option under the right circumstances. You can lease all sorts of equipment; computers, office furniture, and machinery. There are, as with most things, ups and downs to leasing as opposed to purchasing. Let’s delve in.
PRO: Short term cost. If you’re only in need of the equipment for a small amount of time, leasing may be a better option for you.
CON: Of course, if you need equipment long term, you can still lease. If this is going to make you money and turn a profit by having that new machine or computer, it may be worth it. However, you’ll want to carefully calculate that you’re not spending much more than the equipment is worth.
PRO: Leases typically offer fixed financing rates.
CON: Balloon payments at the end of the lease term are not uncommon. This is a final, large payment after making all the smaller payments through the rest of the term. The problem is that the balloon payment can often be more than the equipment is worth.
PRO: Having a close-end lease will leave you owing nothing at the end of the lease period. At that point, you simply turn in the equipment and walk away.
CON: When you have an open-end lease, you also turn in the equipment. However, you have to pay the difference should the equipment not be worth what it was in the contract at the time of the agreement. Also, you want to be sure you won’t be responsible for paying for wear and tear.
Places you can look if considering an equipment lease are:
Independent Leasing companies, bank and firms that are bank-affiliated, captive leasing companies (attached with the manufacturer of the equipment you’re leasing), and equipment dealers and distributors.
The bottom line when deciding to lease or not to lease is if it makes financial sense for you. Sometimes, it’s more logical to purchase the equipment outright with personal funds or of course, borrowing the money. Should you decide to go that route, give us, here at Fast Capital, a call at 800-735-6107. We’d be more than happy to help you with some options you may have.