A new piece of equipment can mean big things for almost any small business — it can keep members coming through the door or it can help a business to run smarter. But before you write out a check, consider equipment leasing for your next equipment purchase. Here’s why:
You can get it right now.
When that new piece of equipment is crucial to your operation, waiting for the funds to be available isn’t always an option. With a lease, you won’t have to put forth a hefty upfront payment and won’t have to worry about using up cash on hand that is needed for other expenses.
You’ll know what you’re paying each month.
With the prices of equipment and technology always increasing, the option of being able to plan and budget for a predictable monthly payment will be a huge benefit to your bottom line. With a lease, there will never be any surprises or variability and the payment can be worked around almost any budget.
You’ll have a competitive advantage.
Leasing the newest fitness equipment will allow you to stay ahead of the competition that might not have access to the same equipment. When the lease is over, you have the option to upgrade to the newest version or a different piece of equipment altogether.
You’ll keep your cash reserves free.
Paying for the equipment over time with a lease agreement means that there is no huge cash burden with your purchase. You’ll be able to keep your cash reserves clear for other unexpected expenses or emergencies.
You won’t need to be afraid of obsolescence.
Many businesses fear the ever-changing nature of consumer taste — worried that “what’s in” will be “out” the second they make an equipment purchase. With a lease option, you’ll be able to hand your purchase back when the lease is up and move on to the next big thing.
You’ll bundle in soft costs like delivery and maintenance.
With any equipment purchase, there are always soft intangible expenses, like delivery or scheduled maintenance. With a lease agreement, these costs can often be rolled right into the purchase price.
You’ll reap some serious tax benefits.
The entire lease payment, unlike a loan payment, can be deducted as an operating expense in the period in which it’s paid, hence reducing the overall cost of the lease. On top of this, payments are treated as expenses on the income sheet. So, there’s no need to worry about depreciation.*
You’ll have flexible payment options.
Some lenders will offer the benefit of deferred payments, so you can begin to use the equipment before you have paid a cent for it. You will even be able to create a “stepped” payment plan, meaning the future payment can be higher or lower as needed.
You won’t have to hassle with the bank.
Getting a loan from a bank is often not an easy process, as there’s usually a lot of red tape and unpredictable regulations and restrictions. With a lease through an alternative lender, you can avoid the bank and rest assured that the financing process will be simple.
*This information is not intended as tax advice. Check with a licensed tax advisor for any tax benefits that may be valid for your purchase.
Jamie Carpentier is the senior marketing manager for Direct Capital Corporation. For questions or comments, e-mail directcapitalvend@directcapital.com or call (866)-267-1904.
