These days most of the small businesses prefer to lease equipment instead of buying them. Banks are quite aware of this emerging trend and that’s why they have started providing small business equipment finance facilities and lease financing to small businesses.
But there are some things that you must consider when leasing equipment for your small businesses. These are some important points that you must keep in mind.
Leasing Equipment’s advantages:
- Leasing can be a better option than buying if there is a chance of becoming outdated of the required equipment.
- If you want to have these equipments for some temporary projects, you would waste your resources if you buy this equipment.
- Sometimes, you don’t have any tax advantages of buying equipment and in such situations leasing can prove a better option.
The biggest Disadvantage:
- In sound economy and low inflation rates, there are some tax advantages of buying equipment that don’t exist in leasing equipment.
- For leasing equipment, you either have to take a bank’s help or go for a leasing company.
Leasing Equipment from Banks:
The financial resources of the banks are considerably larger than most of the leasing companies and that’s why they can help you to get equipment on lower interest rates. However, there is a disadvantage of leasing equipments from banks as they look at the credit history before leasing some equipment.
Leasing Equipment from Leasing Companies:
It may prove better for you to lease equipment from a leasing company if you are a small business owner. More often, the amount you pay for lease from a company is lesser than the lease amount and interest rates that you have to pay a bank. The leasing company takes back its equipment at the end of the lease period and you avoid from reselling or storing these equipment.
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