What's your take on equipment leasing? While roughly 8 out of 10 U.S. businesses use financing for equipment and software instead of purchasing them outright, many misconceptions still exist. Let's explore some common myths of equipment leasing and uncover the real benefits of diversifying your funding strategy.
Myth 1: We prefer using cash instead of taking on debt through a lease or loan.
Many of the most profitable, cash-flush companies use leasing as a strategic tool to increase liquidity, invest capital in other high-return initiatives, and take advantage of tax benefits.
Myth 2: It’s easier for me to use my existing bank line of credit than equipment lease financing.
Companies who work with their primary bank for capital projects often explore alternative funding relationships to diversify their funding sources, avoid covenants and fees, and ultimately complement their banking relationship. Leasing is typically less complicated, more predictable and much faster than a commercial banking transaction.
Myth 3: Lease financing is too expensive.
When considering the cost of acquiring equipment beyond its face value, leasing’s many financial benefits can make it a more cost-effective solution than buying assets outright. Leasing often costs less than today’s cash purchase price, and you can avoid the indirect costs associated with long-term ownership, like ongoing maintenance and obsolescence.
Myth 4: It takes too long to get equipment through leasing.
While traditional methods of financing can be bogged down with slow approval processes, red tape, and lots of paperwork sent through the mail, modern lenders make the leasing process simple, streamlined, and fast. With straightforward documentation, electronic signatures and invoicing, and hands-on project managers, you can get the equipment you need without unnecessary delay.
Myth 5: Only certain types of equipment can be leased.
Leasing is a smart solution for all types of capital expenditures across virtually all industries—from medical equipment and technology hardware and software to complex facility upgrades, renovations, and build-outs.
Interested in learning more about the benefits of equipment leasing? Download the free e-book: 10 Leasing Myths Debunked.
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