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What Equipment Leasing Can do for Your Bottom Line

What Equipment Leasing Can do for Your Bottom Line
09 Oct 2013 Comments Joyce Schwob

Smart business people know that in order to stay productive and competitive, they need to continually upgrade their equipment. But few things can drain cash from a business like major equipment purchases.  Equipment leasing can be the right solution for a lot of reasons.

 

The Benefits of Leasing:

Leasing offers many advantages over other financing methods. A lease gives you, the lessee the use of the equipment, while the lessor maintains the ownership of the equipment. The Association for Equipment Leasing and Finance offers these insights:  

• Tax treatment

The IRS doesn’t consider an operating lease to be a purchase. Instead, it is a tax-deductible overhead expense so you can deduct the lease payments from your corporate income. • Balance sheet management Because an operating lease is not considered a long-term debt or liability, it does not appear as debt on your financial statement, making you more attractive to traditional lenders when you need them.

• 100% financing

With leasing, there is usually little or no money down. Often, only the first and last month’s payment are due at the time of the lease. Since a lease does not require a down payment, it is equivalent to 100% financing. That means that you have more money to invest in other revenue-generating activities.

• Immediate write-off of the dollars spent

Leasing payments are treated as expenses on a company’s balance sheet. Equipment does not have to be depreciated over five to seven years.  

• Flexibility

As your business grows and your needs change, you can add or upgrade at any point during the lease term through add-on or master leases. You also have the option to include installation, maintenance, and other services if needed. JIT offers excellent full-maintenance services that can reduce the workload on your internal maintenance people.

• Customized solutions

Many types of leases are available, allowing you to tailor a program to fit your month-to-month or year-to year cash flow needs. Seasonal businesses can make higher payments during peak production times and have reduced or even furloughed payments during their “off-season”.

• Limited need for asset management

There is a cost to acquiring, maintaining and ultimately disposing of assets. Leases can be structured to shift all of that responsibility to the lessor. A lease which includes full maintenance frees the lessee from the hassle of equipment repair, scheduling and performing routine maintenance, even from having to source equipment to use when the asset is out of service. We can build a full maintenance lease that takes you completely out of the forklift business so you can focus on what you do best.

• Upgraded technology

You always want to have the latest technology for the better of your company so a short-term operating lease can help you get the equipment you need on a budget. Recent innovations in equipment safety features, increased productivity, improved operator ergonomics and gains in fuel efficiencies are all valid reasons to acquire new equipment now.

• Speed

Leasing can allow you to respond quickly to new opportunities with minimal documentation and red tape. We can approve your application quickly so you can have the equipment you need as soon as possible.

• Improved cash forecasting

Each month, the lease payment will be exactly the same, so you can have a better prediction of your monthly expenditure.

• Flexible end-of-term options

There are a few options you can choose with the equipment after the lease term ends, including returning the equipment, renewing the lease or purchasing the equipment.

 
Great financing options are available right now. Could leasing be right for your business? Call our Sales Department at (716) 569-2410 to learn more.

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