There is an argument to be made for businesses that buy versus those that lease their equipment. Some business owners are not sure which avenue is the best for their company. Most people, however, recommend that if you are a business that has a long history, with plenty of capital, it makes sense to buy. Other people suggest that new business owners can save a lot of upfront costs through leasing. Leasing, though, is the boulevard that both businesses should take, as the benefits of leasing equipment outweigh the detriment of buying it.
For both the large and small business (corporation or ma and pa shop), the startup expense for purchasing equipment will be enormous when juxtaposed against the fees for leasing the same equipment. Money in the businesss pocket is always good for business. One of the main reasons this is always true for any business is the fact that when you lease equipment, you are acquiring assets with little to no money of your own. Ergo, the cash slate will not be entirely wiped clean just because you need equipment to actually run your business.
When you go to the bank to obtain financing for your business, they are going to tell you what they have to offer you. When push comes to shove, you wont have any leverage to secure a smaller borrowing percentage for what you borrow. Not true for leasing equipment. The company youre leasing the equipment from wants your business"thats how they make money (banks have plenty of money to throw around these days). When you lease, you have more flexible terms and when negotiations get rolling, youll have some say in both the amount of payments youll make, how long youll make the payments and what leasing the equipment entails. More often than not, youll get the equipment with good or bad credit, and the deals will be flexible. Try doing that at the local bank.
Once the equipment you use becomes obsolete, then what? When you lease the equipment rather than own it, youll be able to upgrade to newer equipment at a fraction of the costs once your lease expires. Rather than take on the millstone yourself, pass it on to someone else. This sort of lease becomes thrice as important if you plant to buy (or lease) equipment that is soon to be outdated. Computers, palm pilots, hand computers, laptops, printers and projectors are just a few of the expenses that you can slash by leasing. In a year or two, youll have new equipment on the way for the same amount of cash. You know the amount your spending, and where youre spending it, over a longer period of time. The allocation of funds is thus predetermined, set and exact.
A maxim says that the things you own will eventually start to own you. That is, when you lease equipment, you save money in the long haul by never having to worry about your stuff breaking down. If it does, its often fixed or replaced for free. When you pay for the usage and not the ownership of your equipment, you are essentially a maintenance-free business. Plus, youre only paying for what you use over time. If you use a computer for a year, for example, you can easily upgrade (needed, mind you) within a year. Obtaining finance at the bank these days should turn you off to the idea of owning anything in the first place. Your leasing arrangement can often be a sealed deal in less than a business day, and the time constraints are flexible enough to keep you running strong.
Whether youre leasing construction, medical, commercial vehicles, restaurant or printing equipment, the money spent is more often than not a tax deduction. The expenses of using the equipment can be deducted as an operational charge. A bank loan payment cannot be used for tax purposes as easily as the money spent for leasing the same equipment. Under the 179 US tax code, it is plausible to get an immediate 100% tax deduction from your taxable income with leased materials. Leasing equipment gives small and big business alike the chance to get ahead and succeed in a business or personal world filled with challenges. Leasing equipment actually puts your business one step ahead of competitors, giving you the edge to doubly grow and prosper for a long time.
For both the large and small business (corporation or ma and pa shop), the startup expense for purchasing equipment will be enormous when juxtaposed against the fees for leasing the same equipment. Money in the businesss pocket is always good for business. One of the main reasons this is always true for any business is the fact that when you lease equipment, you are acquiring assets with little to no money of your own. Ergo, the cash slate will not be entirely wiped clean just because you need equipment to actually run your business.
When you go to the bank to obtain financing for your business, they are going to tell you what they have to offer you. When push comes to shove, you wont have any leverage to secure a smaller borrowing percentage for what you borrow. Not true for leasing equipment. The company youre leasing the equipment from wants your business"thats how they make money (banks have plenty of money to throw around these days). When you lease, you have more flexible terms and when negotiations get rolling, youll have some say in both the amount of payments youll make, how long youll make the payments and what leasing the equipment entails. More often than not, youll get the equipment with good or bad credit, and the deals will be flexible. Try doing that at the local bank.
Once the equipment you use becomes obsolete, then what? When you lease the equipment rather than own it, youll be able to upgrade to newer equipment at a fraction of the costs once your lease expires. Rather than take on the millstone yourself, pass it on to someone else. This sort of lease becomes thrice as important if you plant to buy (or lease) equipment that is soon to be outdated. Computers, palm pilots, hand computers, laptops, printers and projectors are just a few of the expenses that you can slash by leasing. In a year or two, youll have new equipment on the way for the same amount of cash. You know the amount your spending, and where youre spending it, over a longer period of time. The allocation of funds is thus predetermined, set and exact.
A maxim says that the things you own will eventually start to own you. That is, when you lease equipment, you save money in the long haul by never having to worry about your stuff breaking down. If it does, its often fixed or replaced for free. When you pay for the usage and not the ownership of your equipment, you are essentially a maintenance-free business. Plus, youre only paying for what you use over time. If you use a computer for a year, for example, you can easily upgrade (needed, mind you) within a year. Obtaining finance at the bank these days should turn you off to the idea of owning anything in the first place. Your leasing arrangement can often be a sealed deal in less than a business day, and the time constraints are flexible enough to keep you running strong.
Whether youre leasing construction, medical, commercial vehicles, restaurant or printing equipment, the money spent is more often than not a tax deduction. The expenses of using the equipment can be deducted as an operational charge. A bank loan payment cannot be used for tax purposes as easily as the money spent for leasing the same equipment. Under the 179 US tax code, it is plausible to get an immediate 100% tax deduction from your taxable income with leased materials. Leasing equipment gives small and big business alike the chance to get ahead and succeed in a business or personal world filled with challenges. Leasing equipment actually puts your business one step ahead of competitors, giving you the edge to doubly grow and prosper for a long time.
