Getting the equipment leasing you need is key to expanding your business and moving forward smartly. With it, you have access to all of the equipment, software and furniture you need to operate successfully and make a profit.
The advantages of leasing are it does not tie up capital or bank lines of credit and there is no need to rely on credit cards. Through equipment leasing you can get equipment with a minimal initial investment. When using this common form of financing there are a few types of leases to consider:
A finance lease, also known as a capital lease, is a lease that closely resembles a loan. For tax purposes you own the asset and must record it on your balance sheet. When the lease is paid in full, the lessor will release their lien on the equipment. You typically do not need a down payment in this form of equipment leasing and in the end, you own the equipment.
You can also use a true lease which, rather than owning the equipment, functions more like a rental agreement. This is a solution for companies that want to keep the equipment off their balance sheet or avoid the hassles of technological obsolescence. The rates are often lower for true leases but you can’t claim the tax benefits of owning the equipment. Alternatively, you can use a true lease/FMV; it gives you the option to purchase the equipment at fair market value at the end of the lease.
There are also leases that are specific to your industry and what equipment you need. For example, TRAC leases are designed for over-the-road vehicles and trailers. Tax-exempt municipal leases, or a lease with an option to purchase for nominal value, are for government entities who are qualified lessees.
Before you pursue equipment leasing, it’s important to understand the different options and consider how long you want to keep the equipment and whether it’s important to you to own it. The Small Business Fundz team can help you understand your options get you the equipment lease that best suits your needs. Call us at (866)546-6002 or contact us today.
Other Types of Business Financing
- ACH Loans
- Debt Consolidation
- Merchant Card Services
- Merchant Cash Advance
- SBA Financing
- Small Business Financing
- Start-Up Finance
- Unsecured Loans
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