Any small business owner knows the importance of watching their bottom line, but at the same time, no business can afford to fall behind in getting the latest equipment for their operations. Fortunately, business owners don’t have to break the bank in buying new business equipment. Equipment leasing is a solid way to give small and medium sized businesses an important leg up in the small business world in a few important ways.
Conserving Your Cash
Leasing equipment means money that would have gone to purchasing equipment is now free for other uses. You can pay bills, meet payroll, expand your operations, or invest in advertising or tend to matters concerning your property, like buying new doors or painting office walls. And with regular leasing expenses, you can plan your monthly budget effectively and with no worries. Finally, having more working capital means you can handle unexpected expenses that may pop up.
Cutting Repair Costs
If you buy the equipment and it suddenly breaks or malfunctions, if it doesn’t have a warranty or the warranty’s coverage is limited, you will have to foot the bill for repairs. On the other hand, equipment leasing can take the repair burdens off your shoulders. Since the equipment is owned by the lessor, they bear the responsibility of coming in and fixing the equipment if something should break. Some companies even allow for trade-ins during the leasing period.
Advances in technology can suddenly render a piece of equipment obsolete. Getting rid of it can be a chore. You may have to sell it for far less than you bought it for or even dispose of it without receiving any compensation. Leasing equipment takes care of this problem. When your lease is up, you often have the option to buy the equipment outright or trade it in for an advanced model. By upgrading to a new model after the lease is over, you can keep up with the latest advances.
A Better Balance Sheet
Equipment leasing is also a good way to keep debt off your balance sheet. Monthly lease payments are looked at as business expenses, not liabilities. So when you approach a bank or another financial lender for a loan, they will see a balance sheet with less debt than if you had to pay off equipment that you had purchased, and will be more likely to approve financing for your business.
Business equipment leasing is a great way to save money while also allowing you to keep up with the latest technological advances, as well as keep unwanted debt off your balance sheet. It all adds up to a healthy and innovative small business.