Starting a business can be a long process that consumes both time and money. Also, with everything that goes into a business and the plethora of duties that must be attended to daily such as logistics, marketing, and finance management maintaining a growing a business can be stressful as well. One detail of both starting and growing a business that can be made easier is dealing with equipment. By leasing equipment your business can flourish from the start. What are four advantages of equipment rental for your business?
Technology and equipment can change and become obsolete in what seems like the blink of an eye. If a business is to remain relevant and profitable it must consider having the most up to date technology. This can be difficult, if not impossible, if the company has purchased the equipment. However, if a business has leased equipment then it would be the simplest process to upgrade to the most recent models once the rental agreement has concluded, thus ensuring that the newest technology is always on hand.
Leasing equipment can help a business with cash management. Leasing the equipment necessary for daily operations can free up capital that can be used in other aspects of the company such as expansions or unexpected expenses. Leasing also helps with cash management because rental agreements consist of a monthly payment. This monthly payment is fixed in both amount and the date on which it is due, making budgeting considerably easier. Having a consistent monthly budget and expenses allows a business to think in terms of long term growth and expansion without tying up cash flow that can be allocated to other expenditures.
Tax Advantages and Better Balance Sheets
Companies that choose to lease equipment also benefit from tax advantages that do not come with purchases. If a business purchases equipment then the purchase can usually be deducted as a business expense within a the tax year, but at a depreciated value. However, businesses that choose to lease equipment can deduct the monthly payments as a business expense. Those monthly lease payments can also be viewed as a business expense on the balance sheet, instead of debt, whereas the purchase of equipment may lead to long term debt which is not as attractive to lenders should the business have any other credit needs. With all of these benefits leasing equipment is definitely an option for most businesses to seriously consider.
For more information on leasing your business equipment, contact Bull Market Capital: Business Funding Solutions.