6 Reasons You Should Lease Your Business Equipment

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Starting and maintaining your own business is an exciting endeavor but most would agree it can also be time-consuming and expensive. Many business owners turn to equipment leasing companies to save money when starting their businesses. Consider these reasons to try business equipment financing.

You May Get 100 Percent Financing

Many equipment financing companies are not as stringent about their lending requirements. Most traditional lending companies require collateral or won't finance the full amount but by using an equipment leasing company, you are more likely to find 100 percent financing with no down payment. This is especially helpful if you are starting your business with a limited cash flow.

There Could Be Tax Benefits

If you lease equipment for your business, you may be eligible for tax benefits under the IRS' Section 179. If your company qualifies, you can deduct the full amount of the lease payments you made throughout the year. If you purchase the equipment right away, you can only deduct a certain percentage of it each year.

You Will Have Access to the Latest Technology

When you choose equipment financing, you avoid getting stuck with outdated equipment because you can't afford to upgrade. When you lease equipment, it is easier to upgrade for a small fee rather than to pay thousands of dollars outright for brand new equipment. This is especially important if your business is one in which technology advances quickly as it will be harder to sell any old equipment you have.

Your Balance Sheets Will Look Better

When you get your equipment through equipment leasing companies, it looks better on your expense balance sheets. A monthly lease payment is considered a business expense, but if you were to purchase your equipment outright, it would be filed under a liability or long-term debt. The less debt your company has, the more likely you are to receive funding for your business as you need it.

You Probably Won't Need to Worry About Repairs

In many cases, business equipment financing comes with added bonuses. Leasing companies often provide asset management services. They will track your equipment to let you know when an upgrade is available as well as install it, teach you how to use it and maintain it. When you are ready, the company will return to gather and dispose of any equipment you no longer plan to use.

You Can Manage Risk

Nobody wants to think about the possibility of failure but the unfortunate truth is that the majority of new businesses fail within the first five years. If you purchase your equipment out of pocket and then decide to close your business, you could find yourself stuck with equipment that you no longer need but that isn't updated enough to sell. With business equipment financing, you can simply return what you don't need if you decide to end your business deals.

Regardless of the type of business you run, chances are you will need office equipment at a minimum. You may need machines to make food or create products as well. Don’t risk wasting money by purchasing it outright when you can use equipment leasing companies such as National Business Capital.