Reasons to Consider Leasing Equipment
At first glance, it might seem like buying equipment would be the way to go. However, there are several advantages to leasing equipment. You may not own the item with a lease, but the benefits more than make up for it.
One great perk is that the IRS considers leases to be tax-deductible. You can write off the entire value of the lease on next year’s tax forms. In this scenario, it is considered to be an overhead expense, so ultimately, you can save money in the long term by leasing.
Leases also provide your business with flexibility when the need for change comes up. Technology is rapidly advancing, so you may want to acquire a new piece of machinery in a year in order to stay current. When you buy something, you own it. That means you have to go through the trouble of trying to sell it, and you will likely have to sell it at a depreciated value. With leases, you can simply choose not to renew the agreement. Many times, you can even work with the leasing company to acquire the new equipment you desire.
Leasing equipment is much easier to manage in terms of cash flow. Purchases, especially those for a very expensive item, require you to invest money you may have in savings right now. You never know when an emergency will come up, and if you have spent a lot of money on this purchase, you may not be able to address it right away. With leases, a certain amount gets paid every month. This allows you to better plan for the future because you know exactly how to budget future expenses.
Leasing companies also know how to act fast and respond quickly to changes. Initially, you can expect the application process to go rapidly, and you will know in a short amount of time whether you are approved. In the event changes need to be made to the lease, the company should be willing to work with you. At the end of the lease, most companies offer flexible options. You can decide to renew and keep the equipment longer. Sometimes you can even opt to purchase the machinery from the company if you know that will be the more prudent option going forward.
The benefits to be gained with leasing equipment certainly make it an option worth considering. It is especially advantageous to smaller companies that need to be mindful of cash flow. Find companies near you that offer lease agreements.