To better manage cash flow and operating expenses, the choice for many businesses is clear: equipment leases. Many businesses look for ways to address their equipment financing challenges. Large capital expenses can require you to pay for equipment before you generate revenue from it.
The Equipment Leasing and Financing Association (ELFA) research shows that eight out of ten U.S. companies lease some or all of their equipment. And, nine out of ten say that they will use equipment leases again. Of all the ways to acquire equipment, leasing is the method most frequently used for all equipment types. In fact, almost any type of equipment can be leased – from computers and printing equipment to trucks and bulldozers.
It is important to point out that equipment leases are not loans. As a result, their costs are figured differently from loans. To compare loan and lease products, it is better to compare monthly payments than to try to compare loan interest rates with lease rates. On a cost-of-capital basis, equipment leasing may be the least expensive option.
Equipment leasing companies can offer competitive rates for a number of reasons. Lessors – with their volume purchasing power – can secure attractive financing deals and pass along the savings to the lessee.
Equipment Leases: Choosing the Type that’s Right For You
Once you’ve completed your evaluation and decided to lease your next equipment acquisition, the first step is to select the types of equipment leases that fit your needs.
When deciding which type of lease is best for your company, you should consult with your CPA/Accountant/Tax Advisor. It is important to keep in mind:
- How long you want to use the equipment
- What you intend to do with the equipment at the end of your lease
- Your tax situation
- Cash flow
- Your company’s specific needs as they relate to future growth
If you want to learn more about equipment leasing, contact Advantage Leasing. Advantage Leasing Corporation is a national, independent leasing company based in Milwaukee, Wisconsin that provides flexible financing options for new and used equipment ranging from $5,000-$250,000.
Contact us online or call us at 800.949.7040.