Benefits Of Leasing

Equipment Capital Corp believes that leasing equipment is the best option for your business when it comes to acquiring equipment.

An effective way for you to manage the cost of replacing equipment while maintaining your cash flow is by leasing that equipment.  Choosing leasing over buying is a way to avoid large up-front cash outlays or burden to your current credit.  An accountant can help you decide what is best for your individual business, but there are a few questions you will want to think about.

How long will you need the equipment?

If you only need the piece of equipment for a limited time, if it will soon be out of date/obsolete, or you will be upgrading the equipment on a shorter time frame (every couple years), then leasing may be a better option. Alternately, if your plan is to keep the equipment for its entire useful life, you might be better off purchasing it.

What are the tax benefits to leasing equipment?

In some cases, the lease is structured with business tax claims in mind, and these can work in your businesses favour, even if you plan to keep your equipment for its entire productive life.

How will you be paying for the equipment?

Usually, you want to avoid paying for long-term assets/equipment with your companies working capital, that is, the money you need to run your business, including carrying receivables and buying inventory. This could hinder your ability to pay recurring items like your lease, utilities, taxes or payroll if industry conditions get strained.

What’s the total cost to acquire the equipment?

Before you decide which option is right for your business, compare the total cost of leasing to the total cost of financing the equipment purchase with a loan. Remember you need to include all interest, insurance, maintenance costs and taxes that you would pay if you own the equipment.

Additional benefits of leasing equipment

Leasing can be the ideal way to finance expensive, income-generating equipment as well as other necessities like computers, office furniture and other business needs. Other benefits of leasing equipment include:

  • The option (in some cases) of having either a fixed or floating interest rate
  • Seasonal payment plans, which allow you to align payments with cash flow needs
    • Ability to acquire equipment for a predetermined time frame acting as a hedge against the equipment becoming obsolete

Call us today at 403-710-5847 to talk to a financing specialist for all of your equipment leasing needs.