Why Lease Business Equipment
The main reason that companies prefer to use a Commercial Equipment Lease as apposed to a Commercial Equipment Purchase Loan is quite simply a lesser cash outlay at the time of the purchase. You generally do not need to put nearly as much down on an Equipment Lease as you do with an Equipment Purchase.
Another prominent reason is the fact that with a Commercial Equipment Lease you can turn in the old obsolete equipment at the end of the lease and re-lease new up-to-date equipment.
The next important point in favor of Commercial Equipment Leases is the tax implications. Did you know that if you structure an Equipment Lease properly, you can expense 100% of the lease payment in the year you make your payment? Check with your accountant for details, but it is true, as long as you set it up right.
Types of Equipment you can Lease.
There are few limits to the type of equipment that can be leased. From everyday business essentials (furniture and phone systems) to industrial equipment (forklifts and conveyor belts) to office technology (copiers and LCD projectors), there is a wide range of products your business needs that you can consider leasing.
When you look at the type of Commercial Equipment that is leased you will notice that most are hard assets meaning you can touch and feel them like a computer or a excavator or building as apposed to assets which are soft assets like Brand Names or Software. Also, the price tag of the hard asset will be at least $5,000 accumulated value, meaning if the individual price of a single item is irrelevant but the value of the entire lease package needs to be at least $5000.
In case you are wondering about soft assets and why they are harder to lease, think of it this way. If the Commercial Leasing Company had to reclaim the assets being leased, and you had financed the expense of the training cost portion into the lease, what is the Business Leasing Company left with to resell? Nothing, so it will be an entire loss. Not a good scenario.
You’ll want to make sure to inquire early on about your Commercial Leasing Company policies if soft asset financing is important to you. You can also use a free vendor comparison tool to review the different types of equipment lease programs that companies offer.