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Equipment Leasing Advantages
Equipment leasing is basically a loan in which
the lender buys and owns equipment and then
"rents" it to a business at a flat monthly rate
for a specified number of months. At the end of
the lease, the business may purchase the
equipment for its fair market value (or a fixed
or predetermined amount), continue leasing,
lease new equipment or return the equipment.
Any business at any stage of development is a
candidate for equipment leasing. For start-up
businesses with no revenues, "small ticket"
leases, those of $150,000 or less, are feasible
on the personal credit of the founders or
owners; if they are willing to make the monthly
payments.
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Leasing can also finance the soft costs
often associated with equipment purchases,
such as installation and training services.
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Leasing provides 100% financing, conserving
cash and preserving lines of credit for
working capital purposes.
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Leasing provides a close matching of the
lease term and payments to the revenue
produced from employing the equipment.
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