Tips for Success With Equipment Leasing
Many lenders were surprised to see how quickly equipment leasing has become the norm for modern businesses. For a long time, it seemed like small business owners were hesitant to lease and preferred to buy items outright. For equipment though, trends are different. Countless businesses prefer leasing to loans when getting equipment for business operations. Why is this trend growing and how can today’s small business owners take advantage of it?
Enjoy the Benefits of Equipment Leasing
There are many reasons for leasing’s popularity. Put simply, it often meets all of the needs of modern business owners while providing reduced hassles compared to traditional loans. When there’s a solution that saves a lot of time and headaches, it turns out that businesses prefer it even if it costs a little more over time.
Leasing is fast. It’s possible to get approved and funded in just over a week. Traditional bank loans can take months for the same purchase. Of course, equipment financing is another quick funding option for businesses that prefer the lower interest rates of loans.
Another advantage of leasing is the option to get equipment without a down payment. It’s easy to start using the equipment immediately with monthly payments alone.
Comparing that to traditional bank loans, it’s no shocker that small businesses find a 0% down payment option convenient. Conventional bank loans often require you to have at least 10–20% of the purchase price. For heavy machinery, that could mean needing anywhere from $10,000 to $50,000 or more for a down payment.
Check Out Your Options
It’s still good to check out your available leasing options before signing on the dotted line. Some lenders offer special introductory offers or have lower interest rates. Check out the qualifying factors as well.
Many lenders offer startup equipment leasing options, but you may save money if you have a few years in business. Other factors that affect your total interest payments include the size of the lease, the type of equipment and your credit score. Items that keep their value well over the years often have lower interest rates compared to the technology that gets outdated every few years.
Talk With the Lender About Your Needs
Equipment leasing companies are less rigid than banks, so feel free to share any concerns or needs you have. It’s often possible to structure payments in a way that is more comfortable for your business’s monthly cash flow. You may be able to qualify for special tax credits as well.