Leasing video equipment is an excellent way to grow your business without significant out of pocket expenses. Leasing offers real advantages including better value, more convenience and greater control.
In most cases, the full amount of the equipment, as well as the service, shipping, installation costs and maintenance can be included in the lease. This spreads the cost out evenly over the term of the lease freeing up your money to work harder for you.
Make better use of your money
- Conventional bank loans usually require more money upfront than leasing and often have restrictive covenants.
- Conventional debt financing may require a 10-20% down payment.
- Leasing generally requires only one or two payments upfront, which are applied to your future payments.
Finance 100% of your costs
Many leases have a no down payment option. This will allow your business to finance 100% of the cost. This 100% financing often includes extra expenses like taxes, installation, delivery, and maintenance. By not having to pay money down businesses can use that money for advertising or other working expenses within the business.
Leasing equipment also isn't as difficult as trying to obtain another form of financing. For equipment purchases under $100,000 you typically will not have to provide financial statements, tax returns, or a business plan. The form you fill out is a simple one page form that is similar to filling out a credit card application. The approval process is also rather quick as compared to a loan which can take days or even weeks before you are finally approved for the financing.
Realize significant tax savings
Monthly payments on operating leases are typically viewed as operating expenses offering significant tax benefits. You should always consult with your financial advisor to determine the most tax-beneficial lease for your company.
Avoid the risk of your equipment becoming obsolete
With ownership you run the risk that new technology will render your equipment obsolete within a few years, leaving you with equipment that no longer meets your needs and that is difficult to sell. Leasing allows you to replace or upgrade equipment to keep your business competitive.
Improve your cash flow forecasting
The fixed nature of a lease obligation eliminates uncertainty about the future cost of the equipment. Your lease payments facilitate more accurate forecasting and planning.
No ownership dilution
Leasing allows you to increase the cash flow of your company without bringing in investors to finance capital expenditures.
Last update: 11:16 PM Saturday, May 23, 2009