Many businesses can increase revenue by investing in equipment. Put simply, when you have equipment, you can perform more work and finish jobs more quickly. This especially applies to construction businesses, but it’s true for countless other companies as well, including healthcare practices, manufacturers, cleaning businesses, plumbers, transportation companies and many others.
What Options Are Available for New Equipment?
Getting equipment is one of the best ways to keep your company financially healthy, and it should be a top priority. That leads to the next logical question: What’s the best way to get your hands on new equipment for your business?
You have two main options. One is equipment leasing, a program that’s similar to making monthly payments on a new car. You can use the equipment right away, but you’re mainly paying to use it, not to purchase it. A lease contract typically lasts for two or three years.
The other option is equipment financing, also known as an equipment loan. It works like other loans, allowing you to own the equipment after you pay off the financing. Both of these methods are excellent solutions for businesses, but they have pros and cons you need to consider before making a decision.
What Are the Pros and Cons of Leasing?
With a lease, what you see is what you get. It’s easy to calculate the total cost of your payments because they’re the same throughout the life of the lease. Leasing usually gives you lower monthly payments compared to a loan. That can be a big help if you’re going through a period where you don’t have a lot of working capital available.
Leasing is also helpful for taking steps in ramping up your operations. It offers a lower startup cost before you start bringing in profits and seeing the results of your work.
Why Choose Equipment Financing?
Where equipment loans work in your favor is for long-term savings and ownership. Some pieces of equipment may last 20 years or more, such as construction equipment and restaurant equipment. Loan payments may be technically higher per month, but over the life of the loan, you can easily save many thousands of dollars. Once you pay off the financing, you’re generating pure profit for your business!
How Easy Are Equipment Loans and Leases?
One of the beautiful things about equipment financing is that you don’t have to worry about collateral. Lenders are less nervous about risks, so you can obtain nearly any type of equipment. Whether you need carpet cleaning systems, point-of-sale terminals or bulldozers, qualifying isn’t hard.