Smart businesses are trying to use equipment leasing to ensure effective management of their capital. As a matter of fact, 8 out of 10 businesses in Canada now lease part or all of their equipment. The reason is because leasing offers some key benefits for many businesses, when compared to buying equipment. Here are some of the major advantages that you must be aware of:
One of the most important benefits that you can enjoy from equipment leasing is convenience. By choosing leasing services, you will not need to have years of banking credit history and a comprehensive business plan. What this means is that you will be able to get the equipment you need quicker and with less trouble. Moreover, with this type of lease, you will have enough fiscal resources to finance the expenses of delivery, installation, and maintenance. Thus, this is by far the best advantage that you can get.
This type of leasing can give you significant tax savings. Your monthly expenses will be deducted with regards to the current year, instead of being depreciated over several years, as is the case with equipment bought with a loan. Obviously, you will have to consult with your accountant to seek professional advice on what type of tax saving strategies you need to employ, in order to maximize your tax savings.
Another important aspect to consider is the fact that equipment purchased with the help of a loan is considered a debt, whereas monthly payments incurred on a lease are considered a cost. Due to this, leasing equipment can be a great move for many businesses and enterprises. It eventually leads to improved net worth.
Due to the continuous upgrades to technology and equipment, making a long-term purchase might not be a good move for a business. Equipment leasing will enable you to upgrade your technology and systems every few years without too much of a hassle or too many concerns.
With that said, probably the most significant benefit of this is that you can grow your business without incurring major out-of-pocket expenses. It affords you the opportunity to make the best use of opportunities and trends so you can achieve better profits and greater market share.
When choosing equipment financing options, there are certain aspects that need to be considered. One of the first aspects to consider is whether or not the organization providing equipment financing services is reliable and trustworthy. There could be several different companies in your area who are not only reputable, but have also been in business for a number of years. But they must be able to furnish an extensive list of customers who are happy and satisfied with their service.
As a potential client, you need to ask your potential company if it will consider used equipment, as massive savings can be achieved if pre-owned machinery is bought. Moreover, you should also determine the timeframe for approval. With that said, you should think about all these considerations if you are looking to hire a good quality company that provides equipment financing in your area.