- Money savings: This is probably the greatest advantage of equipment leasing, as it can save you a significant amount of cash in the long run. Through equipment leasing programs, you can make payments over a set period of time in a manner that properly aligns with your budget. This gives you more working capital to devote to other important business expenses and expansion efforts.
- Tax benefits through Section 179: This law allows businesses to deduct up to $500,000 in new and used business equipment. While these benefits do also apply if you actually purchase the equipment, the IRS allows you to deduct lease payments under Section 179 as long as your business makes use of the leased equipment.
- No more obsolete equipment: Equipment leasing is one way to help your business constantly stay on the cutting edge of technology. Engaging in short-term leases enables you to make upgrades to newer equipment much more quickly and in a financially efficient manner than if you were to purchase the equipment outright. When you buy technology, you are stuck with it unless you can sell it, and even then you’ll have a difficult time finding buyers who are interested.
- Credit preservation: Keeping your line of credit healthy should always be a priority for any business owner. Equipment leasing enables you to keep that line open and strengthen your cash flow, making it easier for you to get funding for growing your business and paying for regular operational needs.
- Flexibility and ease: Applying for a lease is quite easy, so you can have the equipment you need in your business almost immediately. You also have the flexibility to work within your budget constraints and make any upgrades as you need them.
Which is better: buying or leasing equipment? This is a question many entrepreneurs and business owners struggle with on a regular basis, and unfortunately there’s no “one size fits all” answer. The ultimate choice you make will depend on the size of your business, your specific equipment needs and the amount of capital you have to invest. In many situations, business equipment leasing is the way to go — for a number of reasons. Some of the key benefits of leasing include: