There are a number of reasons why companies might choose equipment leasing, as opposed to outright purchases of equipment needed to operate a business. A lease is a legal document which provides the lessee with the right to use equipment for a specific time duration, in exchange for regular monthly payments throughout that period.
Why companies choose leasing
One of the first big advantages provided by equipment leasing is that all costs are generally included in the lease, and that allows all those costs to be evenly spread out over the duration of the leasing period. Because monthly payments on leases are generally considered to be operating expenses, they provide significant tax benefits which are advantageous to most companies. Leasing also tends to be a very flexible solution to acquiring needed equipment, which allows you to choose the duration of your payment schedule, as well as the amount of your monthly payments.
Another huge advantage to equipment leasing is that the equipment involved never becomes obsolete, because at the end of the leasing period, you can simply upgrade to a newer version of that same piece of equipment, or walk away from the lease altogether. By contrast, when you own a piece of equipment, you are pretty much stuck with it until it does become obsolete, unless you are able to sell it off prior to that time.
As mentioned above, there’s a great deal of flexibility involved with equipment leasing, as opposed to purchasing the equipment. If you find a lender who is willing to work with you, you can arrange for some very favorable terms, including Skip Leases, which allow you to skip payments on certain months of any given year, when you anticipate slow incoming revenue.
Deferred payments might also be arranged with your lender, so that you don’t have to make your first payment until three months or six months have elapsed. Some lenders will allow you to have a Step-up Lease, which gradually increases the payment amounts throughout the life of the lease, so that you have time to generate increased revenue through use of the equipment. You can also establish a Master Lease with several other sub-leases that include other pieces of equipment.
Equipment leasing with Blackwater Capital Funding
If your company is seeking an equipment leasing partner for providing financial assistance, we at Blackwater Capital Funding might be able to provide that needed assistance.
Contact us today to find out how we can help your company lease the equipment needed to take your business to the next level.