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NGEquipment leasing allows your business to rent equipment from either a vendor or a leasing company, for a set period of time. It’s a type of asset finance. At the end of the lease, you must give back the equipment, buy it or renew the lease. Equipment leasing includes finance leases (also known as capital leases), operating leases and contract hire.
If you need it, you can most likely lease it. You may be surprised to find out what you can lease – the printers, computers and coffee machines in your office, the catering equipment at your local restaurant, the treadmills at the gym, the commercial washing machines at the launderette… At the other end of the scale you can lease anything from commercial vehicles and aircraft to plant and machinery.
Let’s say you’ve reached the stage when you need to buy new expensive equipment for your business. You could choose a lease in order to access equipment that may otherwise put a strain on your cash flow.
Equipment leasing is not for everyone, but it can work well for small businesses looking to get started, or for larger companies who want to keep up with new technologies without a significant outlay of cash. Leasing typically works out more expensive in the long term – compared to buying – but can mean lower monthly payments.
There are tax advantages to leasing equipment. While an outright purchase of an item must be listed as capital, leasing is counted as a rental expense, which can be offset against profit.
There are two main types of equipment lease:
- finance leases (also known as capital leases)
- operating leases (including contract hire).
Between equipment leasing and hire purchase, there are many different ways for you to access equipment for your business.
You might also consider asset refinance, which allows you release cash from the value in your existing assets.
