If you are in the market for new equipment or technology for your business, but can’t afford to buy it, leasing is an option to consider.
Instead of buying the equipment or technology outright, leasing allows you to make smaller monthly payments, typically, over a multiple-year period. At the end of the lease, you usually have the option of simply returning the equipment, or buying it for a price that factors in appreciation and how much you paid over the life of the lease.
Leasing equipment in general, however, is very common, especially when acquiring the following categories of equipment.
Here are the top 5 most popular items leased:
1. Commercial vehicles. Owning, running and maintaining a fleet of vehicles can cost you a lot of time and money. If your company uses passenger vans, delivery vans, box trucks, tractors and trailers, or any other vehicle to conduct daily business, leasing might be a solid option for you. From nursing homes that transport groups of residents to activities around town to trucking companies, commercial vehicle leasing is a popular financing option.
2. Medical and laboratory equipment. Most of us consumers have experienced the high cost of health care. Some of that cost can be attributed to the equipment that doctors and dentists need to provide effective diagnosis and treatment. It’s expensive. For many practitioners, leasing items such as X-ray machines, lasers, MRI and CT scanners, and even surgical tables enables them to keep their costs down. Medical and dental equipment leasing is very popular choice.
3. Construction equipment. Equipment leasing is often the first choice for general contractors, roofers, remodelers, home builders, and excavation companies. Heavy construction equipment can be extremely costly, so these companies often find success in leasing dump trucks, backhoes and other earth movers, survey equipment, loaders and more.
4. IT equipment. No matter what business you’re in, you will likely need an IT backbone to support your operations. So it’s no wonder that IT equipment is one of the most popular types of equipment leased. Computers, servers, software, telephone systems, networking and cabling can be leased.
5. Manufacturing and industrial plant equipment. An especially costly category of equipment is in the manufacturing and industrial sector, making it a popular equipment leasing category as well. A manufacturer can lease revenue-producing equipment such as stamping and forming machinery, forklifts, welders and conveyor systems. Leasing is a popular choice when a company does not want to use up its operating cash.
Priority Leasing has over 24 years of experience with negotiating lease financing on all of the most popularly leased items. Ask yourself the following three questions before you get started:
1. What is your monthly budget? Leasing offers substantially lower monthly payments in comparison to purchasing. But it still has to be factored into your monthly cash flow.
2. How long will the equipment be used for? For short-term use, leasing is almost always the most cost-effective way for businesses to go. But if you’re using the equipment for three years or more, a loan or standard line of credit may be more beneficial than a lease.
3. How quickly will the equipment become obsolete? Technology is more likely to become outdated more quickly than other types of equipment. Consider this before deciding whether a trade-in makes sense for you.
If you need to lease any of the above equipment, contact us to see how we can help you get started!