Many people may have an understanding of the advantages of equipment leasing, but may not be aware of when it might be appropriate to utilize a lease. Here are five of the most common reasons for equipment lease financing:
1. You need bigger or better equipment to fulfill orders.
It’s discouraging to turn down opportunities because you don’t have the resources required to meet the needs. While a loan or line of credit might be a possibility, banks are not always as helpful as we’d like them to be. Do you really want to use all of your available line of credit on one piece of equipment? By leasing the equipment, you can keep your lines of credit open for the unexpected emergencies and maintain a healthier cash flow.
2. Keep up-to-date with the latest equipment to stay competitive.
Don’t let times, technology or your competition pass you by! Sometimes upgrading to the “latest and greatest” can really pay off. Maybe it would allow you to produce your product faster, or to produce an improved product which you could then sell at a greater price. With equipment lease financing, you can upgrade to that new equipment and it can pay for itself as you use it.
3. You need two or more machines but only have the budget for one.
Rather than buying one at a time, get all the equipment you need through equipment leasing. Leasing allows you to maintain a healthy cash flow with smaller monthly payments. You can get all the equipment you need now and not lose out on sales!
4. Take advantage of the tax benefits.
Leasing can provide substantial income tax benefits. In addition, with equipment leasing there is no pre-payment of taxes. Instead, you pay GST and PST on rentals; you do not pre-pay these taxes up front.
5. Reduce the Risk.
Many companies prefer to spread their debt commitments around, thus not being at the mercy of any one lending facility. If all of your borrowing is at the bank, what happens if the bank calls your loan? Equipment leasing allows you to get the financing you need without “having all of your eggs in one basket.”
In any number of potential situations, lease financing may provide the solution you’re looking for. If any of these scenarios interest you, or if there’s any other reason you are considering your financing options, please contact one of our leasing specialists. We’d be happy to assist you! We love to “help your business thrive!”