Businesses around the world prefer to lease their equipment and infrastructure requirements. According to the US small business administration 85% of businesses lease their equipment. The prime reasons Australian businesses choose to lease are better cashflow, tax deductability, and keeping pace with latest technology.
You don´t pay for your employees 3 years in advance… why pay for your equipment?
Advantages of leasing
Not having to spend a lot of money up front can help your business manage its cash flow more effectively, especially if you’re just starting out. You’ll most likely have a small down payment (or none at all), as well as a lower monthly payment than if you took out a loan to buy the equipment.
Lease payments can be deducted as a business expense on your tax return.
If you have some strikes against you on your personal or business credit history, it’s usually easier to get better financing terms with leasing than if you were trying to buy the equipment.
Leasing agreements usually come with some sort of technical support from the
leasing company. When you’re in a jam, in-person service and toll-free support numbers can be lifesavers.
One of the best reasons to lease is that it means you always have access to the
latest technologies. Who hasn’t bought a new piece of equipment only to have it
become obsolete in a matter of months? Make sure the lease contract provides for
upgrades as they become available.
Leasing companies usually offer terms to fit your needs and budget, such as closed
end leases, open-end leases, balloon payments, and more. Be aware of all the risks that some of the terms could involve before you sign on the dotted line.
