Worried About Equipment Becoming Obsolete? Try Equipment Leasing
Buying and maintaining equipment is not cheap. Plus, soon after buying a piece of equipment, a new version comes out, rendering yours obsolete. But what if you can overcome this challenge? Equipment leasing offers many advantages that you will not get from owning a piece of machinery. Besides the cost of the equipment being spread over monthly payments, you also get to access the latest equipment, enhancing productivity at the workplace.
What Is Equipment Leasing and How Does It Work?
Equipment leasing is a form of financing where you rent equipment instead of buying it. You can lease different types of equipment, such as vehicles, machinery, and computers. The lease is for a particular period. Once that period ends, you can choose to renew the lease, return the equipment or buy it. During that period, the equipment acts as collateral.
When you lease equipment, you get into a contract with the equipment vendor or owner. Things like your business credit score and the leasing company will determine the rates you pay. But generally, the riskier you are, the higher your rates are likely to be.
Advantages of Equipment Leasing
Here are some benefits you will enjoy from leasing equipment.
It is cost-effective.
You can update your equipment to avoid getting stuck with obsolete machinery.
It allows you to scale depending on the needs of the business
It can offer tax credits
Leasing equipment is ideal if your company requires a piece of equipment that often needs upgrading, such as computers. You get to obtain the latest equipment on the market at a lower initial cost. Note that most lessors may not be keen on your financials, especially if the equipment leased ranges from $10,000 to $100,000. If the financing is over $100,000, you will be required to provide a business plan and complete financials.
On the downside, leasing equipment can be costly, particularly if you choose to buy the equipment once your lease term expires. If you are considering equipment leasing, it is important to weigh the pros and cons to understand whether this is the right move for your business.
Do you feel like equipment leasing is right for you? Reach out to Charis Commercial Capital. We offer different loan products, including equipment leasing, ensuring that you can continue with your business operations.