Many businesses like to purchase equipment. After all, owned equipment can be used as collateral and has an intrinsic equity value. However, there are times when it makes more sense to lease equipment instead of making a large purchase.
Wear and Tear
Businesses in certain industries place wear and tear on their equipment. Construction companies immediately come to mind, and heavy use can severely impact the after market value, as well as general maintenance. Similarly, manufacturers, trucking companies, landscapers, and other heavy industries put equipment through its paces. These companies can benefit from leasing the equipment they need. Leasing agreements often come with built-in maintenance options to keep equipment in working order, instead of paying high fees to a third party for repairs. Additionally, businesses have the option to trade up or purchase their equipment when the leasing agreement comes to a close.
Keeping a Technological Advantage
In addition to heavy industry, there are some businesses that require the latest and greatest equipment to maintain a technological edge. IT companies, design firms, film companies, medical practices, research and development labs, and more cannot afford to rely on outdated or after market equipment. Fortunately, equipment leasing programs offer provisions to allow businesses to upgrade to the latest models as they become available. This allows businesses to maintain a technological advantage in an increasingly competitive marketplace.
Tax deductions are not just for purchased equipment that depreciates year after year. Businesses that lease equipment can also deduct payments made on the leasing agreement. The amount a business can deduct changes regularly, so it is best to consult with an accountant for the latest deduction limits on leased equipment to ensure your business is recouping the correct amount.
Not all businesses can pay for equipment upfront, nor can they secure loans to purchase the equipment they need. Lenders have been tightening their requirements, making it difficult for new businesses that might not have the established credit ratings, as well as businesses with imperfect credit, to get the equipment they want. Leasing options are very accessible to businesses with imperfect credit.
Golden Century Lending provides comprehensive equipment leasing programs to businesses of all types. Contact our offices today to get the equipment you want.