Benefits of Leasing Business Equipment

Equipment leasing is one of the most reliable ways of acquiring business equipment today. Recent surveys in the United States found that about 80% of new businesses obtain some of their equipment through leasing. New businesses are always faced with the problem of finances because their flow of income is still low. Leasing is a better alternative to buying equipment because it enables your business to utilize the capital available for cash flow.

However, there are several questions you need to answer before settling on a particular leasing decision. Some of them are:

1. Do you think you will require the equipment for a long time? If the answer to this is YES, it is advisable that you negotiate a purchase alternative that will ensure that some of the lease payments go to the acquisition account.

2. What are the terms and conditions or legal repercussions associated with leasing? It is a better idea to flick through the lease before placing your signature in it to prevent adverse repercussions.

Advantages of Leasing Business Equipment over Buying!

Low monthly payments

Monthly lease payments are usually lower than the expense of acquiring the equipment through other means. Borrowing to purchase equipment is far more expensive than leasing because of the high interest rates charged by most financial institutions.

Your capital does not get tied up!

Leasing helps you to keep your business money for other requirements. Unexpected expenses are not unusual in the business world and this money also can come in handy as working capital when your revenues are low.

Immediate use of equipment!

Most financial lending sources require up to 25% down payments. Leasing, on the other hand, provides you with the equipment at a nominal up-front cost. Most leases will only require at least one or two advance payments to allow the use of the equipment.

No obsolescence!

Technological advancement is happening at a dangerously rapid pace and a piece of equipment you are using today could be so out-of-date two years down the road. Leasing offers you the chance to enjoy the best of today’s technology while it lasts and upgrading when it becomes obsolete. Therefore, you are able to stay competitive and flexible.

Fixed terms of payments!

Banks and other financial institutions have variable rates of credit depending on the market dynamics. Lease payments are usually fixed regardless of what is happening in the market. It is a better alternative because it protects you from possible skyrocketing interest rates. For instance, there was a rise in rates from about 9 percent to over 20 percent in the same year in the 1980s. Such a financial inconveniency cannot happen with equipment leasing.

Tax advantage!

Leasing has a tax advantage compared to other financing options. Unlike loan payments, equipment lease payment can be a pre-tax business expenditure that can significantly reduce your taxes. Taxes are usually paid on profits and can add up to 40% to the cost of the equipment when paying cash for it.

In a nutshell, equipment leasing is the way to go to save on time and hassle of finding a guarantor for money to buy business equipment. It guarantees a speedy takeoff for your business venture.

Should Struggling Small Businesses Consider a Small Business Administration Loan?

Many small businesses that are struggling with debt wonder if they should consider a small business administration loan. For many the thought of borrowing money when they are already in so much debt just does not make sense. However, this is a very special form of loan offered to small businesses to help them survive this terrible recession we have all been suffering for other businesses, a loan may seem like the only answer to their problems, and in fact they may be making the situation worse in the long term.

Applying for a small business administration loan can be complicated and it can be difficult to understand all the legal issues and requirements associated with this type of loan. For this reason, it is always better to get some professional help and advice so you can access this loan without putting your business into further problems.

Taking out a loan to get your business out of debt can, in some cases, cause more problems and weaken the business further. It is much better, if you are struggling with debt that you speak to a professional as soon as possible. They will be able to advise you on the best course of action. For some this may be negotiating with creditors, or arranging settlements of offer in compromise, but for some a loan may be an option. If you are unsure about what you should do to get your business out of debt, you should speak to a professional adviser urgently, before the debts get further out of control.

While small business administration loans can be helpful, great care must be taken that it is really the best option, for many businesses, they could be putting their whole business at risk. This is why it is so important to get the right professional advice.

Growing debt can very quickly cripple a small business, and in stressful situations like these, it can feel that the only answer is to borrow even more money; this is not always the best solution however.

Small business administrations loans have helped many businesses get through tough times, but they must be dealt with correctly and professional advice is needed to establish whether this option really is the best way to get out of a financial mess.

Instead of worrying, or rushing into borrowing more money, help your business and help yourself by getting the professional advice and support you need, so you will be able to get a true picture of your financial situation, and see all the ways you can work to getting your business out of debt and back on track.

Then, once you have a clear picture of your finances, if a loan is the best option, an adviser will help you apply for it and help you through the entire process. For small business that are struggling and considering a small business administration loan, the first step is to know that there are answers, and help available and that they should not waste any more time, but get the help they need and deserve as quickly as possible.

Equipment Leasing For Business Owners Looking For New Equipment Leasing

Leasing equipment can be very advantageous as it helps you save a lot of money as compared to the money you can spend buying the equipment that you require to meet your business purpose. If you wish to lease specific equipment for a certain purpose in your business it is much better since the leasing of the equipment will help you save money which you can use for the growth and development of your business and you can earn more profits through the use of equipment leasing. Leasing does not cost a big amount of money thus it is affordable and can be used so that you spend less money at the start of the business and the amount saved can be used for cash flow within the business. Here are some of the benefits that you get for leasing business equipment.

Leasing business equipment can help your business in many ways. It does not only free up cash from your business saving money but you can use the saved cash to support your business and therefore it can develop and grow the business to higher levels that could not have been achieved without this amount. This will make you to earn large amounts of profits that could not have been achieved without if you had spent all your cash in buying the equipment. If the save amount is used well then it will help in the growth of your business.

Leasing also helps in the flexibility of the business needs. This is because as the world becomes technologically advanced some equipment might be outdated by introduction of more technologically advanced new equipment thus the need for the new, advanced and improved equipment can be easy by just exchanging the old equipment with the new technology improved equipment.

Leasing is a better deal than buying new equipment for cash. If you buy the equipment you will have to cut into your cash flow and spend more money on maintenance which can be a major threat to your businesses cash flow.

It also helps you to avoid hard to get loans to buy expensive equipment by giving you the same equipment at a much less amount. Leasing companies have also helped equipment leasing by making some beneficial policies to protect those who have equipment acquired by a lease. If you lease equipment you will also have tax benefits for equipment leasing. This will help you strengthen your business cash flow.

While you lease equipment there is a decrease in maintenance cost to a big extent and in addition leasing allows you to only pay for the lease amount and not for ownership amount. This will help you save some cash flow to develop your business.

When you lease equipment you don’t need collateral or down payment funds for the purchased equipment. Equipment leasing does not hurt your business cash flow and through the equipment lease procedure and the management of your business accounts and balance sheet can be easily enhanced.

Having said all this its’ good to know that you only lease equipment to start a business, you can also lease to replace a machine that has broken down. If you want to replace a machine that has been outdated leasing is a good option for your business since it will help you in the future to get into modern equipment.