Why pay in advance for your business assets?
- Return income (profits) over a period of years and,
- Depreciate in value over a period of years
What It Is: 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 it.
Appropriate for: Any business at any
stage of development. 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.
Best Use: Financing equipment purchases.
Leasing can also finance the soft costs often associated with equipment
purchases, such as installation and training services.
Ease of Acquisition: Easy for leases of less
than $150,000. An application for a small-ticket lease is generally no more
complex than a credit card application.
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