Equipment leasing is one of the most affordable ways for small businesses to acquire the machinery or equipment needed to run the business, without having to come up with a large sum of money to purchase the equipment. Besides the advantage of making monthly lease payments instead of a big up-front cash payment, leasing is also beneficial for companies that wish to continue working with relatively new and updated equipment, rather than having purchased equipment which you would have to use until obsolescence. Here are some tips to be aware of when looking for the right kind of equipment lease.
If the nature of the equipment is such that your company’s needs will change relatively quickly, it will be more advantageous for you to agree to a short duration lease period, rather than a longer term, even if that results in higher cost. If the equipment you’re using is fairly standard, the lowest lease price will probably be the one which carries the longest duration.
This may be a very important factor for your small business, because it’s the amount of money you will have to pay the lessor every month during the lease. Make sure that your existing cash flow can cover the amount of any monthly payment that you agree to.
It’s important to find out what your options will be at the termination of your lease. Even if you feel strongly that you will renew the lease at the end of the first term, you should be aware of what your other options are. For instance, you may find that you want to buy the equipment outright at the end of your first term, or you may want to walk away entirely after that first lease agreement has expired.
Make sure you’re aware of the date that your payment is due each month, as well as any fees which might be assessed for late payments. Ask about any security deposits which may be necessary, as well as what kind of warranties are offered to protect your investment.
Equipment leasing with Capital Financing Solutions
Getting the right equipment to run your business can make all the difference between stagnation and real business growth. Contact us at Capital Financing Solutions to discuss financing for the equipment you need to have a more successful and profitable business operation.