Why Equipment Financing Is Better than Equipment Buying
When you’re responsible for keeping the equipment running at a business, you may find that there’s a lot more involved than making sure the power bill gets paid. It seems that any equipment with moving parts or computer software is frequently experiencing problems. What can you do to keep maintenance and repair costs under control? One solution that may surprise you is the decision to choose equipment financing rather than to buy the equipment outright. If you’re not convinced, take a look at some key points.
No Loans Involved
Whether yours is a brand-new business or a business working to maintain a positive cash flow, any new request for loans can leave a negative mark on your credit history. Rather than risking your credit (or getting denied for a loan because of credit that’s already suffering), you could choose to lease equipment. You don’t have to qualify for a loan and you don’t have to worry about any hits to your credit score.
More Affordable Terms
Take a moment to calculate the costs of purchasing and owning new (or used) equipment. First, there is the heft initial cost of the machinery. Second, factor in the immediate depreciation of the equipment. Next, consider the costs of maintaining the equipment and paying for repairs as they become necessary. Finally, think about the expected costs of replacing the machines when they become outdated. Whether you need to purchase power tools for a construction company or copy machines for the office, the costs of ownership add up quickly. On the other hand, when you lease, you make one affordable payment each month and that covers the equipment, the maintenance and repairs, and upgrades when it’s time for the lease to be renewed.
Updated and Improved Machinery
A lot of the equipment used by your business will be necessary for years. Consider the computer and printer that sit in the office. How many years will that computer be useful before it becomes obsolete? How many copies will the printer make before it starts to give you trouble when you can least afford the disruptions? One of the major benefits to equipment financing and leasing is the chance to upgrade your equipment every couple of years. The latest equipment models can go a long way toward improving company productivity.
There may be some equipment that you still prefer to have on hand. If you’re planning to make a purchase, leasing can still be a helpful option. Before you make an investment and long-term commitment in new equipment, use the equipment financing option to try out a few different models to determine the very best option for your business.
Have you tried equipment financing? What were the most significant benefits to your business?