One of the biggest reasons to lease business equipment is that it offers fairly minimal upfront costs. Unlike bank loans that may require a substantial down payment, two advance payments are generally all that are required at the beginning of a lease. This lets you keep your capital in the bank while making important investments in your business.
Some equipment becomes outdated very quickly. This is why many companies use Computer Leasing, Office Equipment Leasing as well as Healthcare Equipment Leasing. Once the lease term has lapsed, they will get new up-to-date equipment to replace the aged equipment.
Then there are the tax implications. There are different types of Commercial leases and you may be able to deduct 100% of the lease payment as an expense on your taxes as apposed to having to use a depreciation scale to write off the purchase over time. For the differences between Capital Leasing and Operating Leases in regards to your taxes, speak to your Tax Accountant and they will be able to give you a detailed guide in relations to your business and industry.
Types of Equipment you can Lease.
There are very few items that businesses use that can not be leased. You can lease assets that you use on a daily basis such as computers, telephone systems and office furniture up to multi-million dollar Specialty Equipment Leasing.
When you look at the type of Commercial Equipment that is leased you will notice that most are hard assets meaning you can touch and feel them like a computer or a excavator or building as apposed to assets which are soft assets like Brand Names or Software. Also, the price tag of the hard asset will be at least $5,000 accumulated value, meaning if the individual price of a single item is irrelevant but the value of the entire lease package needs to be at least $5000.
In case you are wondering about soft assets and why they are harder to lease, think of it this way. If the Commercial Leasing Company had to reclaim the assets being leased, and you had financed the expense of the training cost portion into the lease, what is the Business Leasing Company left with to resell? Nothing, so it will be an entire loss. Not a good scenario.
In the event that leasing soft assets is important to you, be sure to discuss this up front with you Commercial Finance Broker so that they can be sure to take this into consideration.
Tags: Business, Business Equipment Leasing, capital leasing, commercial equipment lease, Commercial Equipment Leasing, commercial finance leasing, equipment finance leasing, leasing medical equipment, office equipment leasing, Small Business Equipment Financing