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6 Benefits of Equipment Leasing

6 Benefits of Equipment Leasing


You have to spend money to make money, right? Let me tell you how your business can save money on the things you need to make money, through equipment leasing. Plus, you’ll get more flexibility for the things that keep your business on the cutting edge.
Most people think of leasing big-ticket items like construction or medical equipment, but businesses can lease just about anything. Nearly 8 out of 10 businesses used leasing in 2019. This option can support your need of more trucks to deliver products; perhaps to replace older computers with faster laptops, the latest software and more networking equipment. Have you moved or expanded? You can lease your new office furniture. Even if businesses that have the luxury of extra cash reserves, consider six equipment benefits of leasing before spending upfront.

1) Save Capital

Let’s face it, most of us don’t have extra cash reserves. If we do, there are plenty of other ways to use it, like hiring new employees, stocking more inventory or expanding a facility.

2) Avoid Obsolescence

Should you pay millions in cash for technology that will change in two years? At the end of a lease, you can return the equipment and get something more advanced or buy the equipment if you choose.

3) Remain Flexible 

A purchase commits you to one particular technology or business strategy. This is especially relevant for purchases that involve your core business offerings. While you might be able to live with aging printers or copiers, if you’re a healthcare company that invested in machines for therapy protocols that are no longer in demand, your business could be at stake. Leasing that technology lets you adapt as your industry evolves.

4) Reduce Your Tax Liability 

If a lease is structured correctly, you may be able to expense 100 percent of the payment.  On a conventional loan, only interest is deductible. Consider the financing options but a lease might bring tax advantages.

5) Shift a Capital Expense to an Operating Expense

As the year progresses, many companies find their capital budgets bursting at the seams. And yet needs and opportunities arise with little regard for those seams. A lease gives you a way to get the equipment you need without blowing up your budget.

6) Gain Predictability

Some investments—like complex technology implementations—involve unpredictable costs. A lease gives you fixed, predictable monthly payments that are spread out over time. This means fewer surprises and better cash flow overall.

At First American, we provide high quality equipment leasing and financing services to stable, sophisticated corporate borrowers.

Fill out the form below to learn more about how First American can customize a financing solution for your business.

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