As a business owner, you know that it can be quite expensive when you’re buying and maintaining equipment. It seems like as soon as you buy a piece of equipment, it’s outdated and the latest, greatest model has come out. This is why many business owners choose to lease instead of owning their equipment.
There are lots of advantages that come with leasing than owning doesn’t offer. For example, lower monthly payments spread out over a period of time instead of one lump sum paid all at once. Plus, many equipment leases add in service and maintenance agreements, which means that you don’t need in-house techs on your payroll to maintain your equipment.
If you find that your business needs new equipment, but you don’t have the expendable cash to buy it outright, leasing may be an option. Let’s take a closer look at leasing equipment for your business.
What is Equipment Leasing?
Basically, this is a financing option that allows you to “rent” the equipment instead of purchasing it. You sign a lease for a certain period of time and once that time is up, you can either buy the equipment at a reduced price or return it.
Leasing is different than financing though. If you finance your equipment, you are taking out a loan and the equipment is the collateral. After the loan is paid off, the equipment belongs to you 100%.
While it’s true that leasing can actually end up costing you more in the long run, it’s a great option for a business that doesn’t have the funds to purchase but needs the equipment to fulfill a project need.
How Does it Work?
If you decide that leasing is your best option, you sign an agreement with the owner/vendor of the equipment. This agreement will state how long you will lease the equipment and how much you will pay per month. It will also state whether there is the option to buy at the end of the lease or if you must return the equipment.
The lease payments vary from one company to the next and your credit score will also determine the rates you’re given. The riskier you are, the more you’ll pay.
When it comes to business equipment, you can lease it, purchase it outright, or finance it- depending on what your current financial state is. Leasing is a great option if you don’t have the expendable cash but need a particular piece of equipment for a certain period of time. Contact JHF Capital today to explore affordable equipment leasing packages for your business.