Why lease, not buy?

Businesses of all sizes and types must at some point purchase essential equipment to start, maintain, or expand their business enterprise. Two traditional methods of acquiring these assets are to use working capital or borrow money from a bank. These options are not always feasible or advantageous. People often say that cash is king. Many companies want to have the most cash available because this will help the company to be more flexible in dealing with changes in the market and from its competitors.

The message bears repeating. When it comes to equipment, whether you’re ripping through your fields on a tractor, tinkering with your computer, or revving up your dental drill for a root canal, you can never start preparing too soon. That’s true whether you’re planning to buy a new piece of equipment or desperately need to replace one that suddenly breaks down.

Leasing can provide a flexible alternative to obtaining the equipment you need to run your business, without having to pay for it all at once. Many experts recommend buying only items that appreciate in value and leasing items that depreciate as they are used.

What is a lease?

A lease is a legally enforceable contract that defines the relationship between one party (“Lessor”) and another party (“Lessee”), granting Lessee the exclusive right to use and possess Lessor’s equipment for a specified period of time. Renter is responsible for all ancillary costs associated with the use and maintenance of the equipment. Taxes and insurance are also the responsibility of the Tenant during the term of the lease. The lease requires the Lessee to make periodic payments, or rents, to the Landlord for the use of the equipment. At the end of the lease term, Lessee may have the option to purchase the equipment based on a default purchase option that may cost as little as $1.00.

Leasing is a great option for new and established businesses that rely heavily on equipment replacements they need on a regular basis to sustain business growth. Our excellent sales staff can help you make these important decisions.

Advantages of lease financing:

– Preserves credit lines conserving working capital
– Improves cash flow
– Leased equipment is often paid only as it is used
– Leasing protects against equipment obsolescence
– Finance leasing applies to most capital acquisitions
– Installation, service, maintenance, supplies, software and other “soft costs” may be included in lease payments
– Flexibility: easy add-ons and upgrades to adapt to changing business needs