Do you know that equipment leasing can jump-start your small or medium size business quickly? Do you also know that equipment leasing can maximize your output/productivity within a short amount of time?
About Equipment Leasing
Equipment leasing is a type of financing in which you rent equipment rather than purchasing it outright. Here are the 4 most important steps you need to understand:
- Lease Agreement: You enter into a lease agreement with the equipment owner or vendor. Similar to a rental lease, the agreement specifies how long you’ll lease the equipment and the monthly payment.
- Use the Equipment: During the lease term, you use the equipment for your business needs. The equipment isn’t yours to keep once the leasing term is over.
- Payment Structure: Lease payments can be monthly, quarterly, semi-annual, or annual. The rates vary by leasing company.
- End of Lease: Once the lease period ends, you have options:
- Return the Equipment: You return the equipment to the owner.
- Renew the Lease: Some leases allow renewal.
- Purchase the Equipment: You may have the option to buy the equipment at the current market rate or lower.
Pros of Equipment Leasing:
- No or Low Down Payment: Leasing requires minimal upfront costs.
- Short Lease Terms: You can lease equipment for as little as six months.
- Lower Monthly Payments: Generally, leasing has lower monthly payments compared to purchasing.
- Tax Deductions: Lease payments can often be deducted as rent on taxes.
- Easy Upgrades: It’s easier to upgrade equipment than if you were to purchase it.
Cons of Equipment Leasing:
- Not an Asset: The leased equipment isn’t considered an asset of your business.
- Higher Overall Cost: Leasing can be more expensive in the long term compared to buying outright.
Remember that equipment leasing is a means to access necessary equipment quickly, especially for cash-strapped small business owners. If you need equipment for a short period or lack the funds for an outright purchase, leasing might be a viable option.
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Aurous Energy Limited got your leasing options covered. Our professionals are on standby ready to discuss your leasing options with you via our free consultation services. Contact us via Call/WhatsApp, or Request a Quotation.
