Equipment Leasing: Is It The Option For My Business?

Here at Century we do not believe in the corporate way, we believe in flexibility and straight forward talking. We pride ourselves in putting our customers first and specialise in speedy decision making.

Our team of experts can offer their specialist knowledge to a range of businesses and cater leasing options to fit your needs. Get in touch with a member of the team today to start building your business today.

Why is Leasing Good for a Business?

Equipment leasing is a good way to acquire assets with minimal initial expenditure. It is essentially a loan of the equipment. It gives you the opportunity to create a new credit line.

If you are a business that is starting up, you might not have the funds needed for purchasing equipment. You can preserve more money rather than spending thousands at a time on new equipment.

Equipment leasing allows you to use the equipment whilst making payments. Knowing your monthly repayments will give you time to plan and allocate budget elsewhere in your business. Business owners with limited capital or who know they will need to upgrade their equipment every few years could find leasing the right option.

Rent or Lease?

Leasing and renting are quite similar; however, they are still differences. Leasing equipment for your business is typically cheaper than renting equipment and you will build equity. You will typically not be asked for a deposit either.

At the end of a lease agreement you can decide to extend the lease, buy the equipment outright or just give it back. It offers a lot of flexibility and it is possible to write off each lease payment as a business expense.

Renting offers the same amount of flexibility. Renting is similar but you do not have the option to buy the equipment at the end and you have not built any equity. Renting is typically more expensive than leasing.

There are a range of leasing companies out there and it is important to know what you are getting yourself into. We offer our expert knowledge to help determine what would be the right fit for you and your business.

Are There Different Types of Equipment Leases?

You can pretty much lease any equipment you would like, so there are lenders out there offering leasing whatever your needs. Typically, there are two types of equipment leases, an operating lease and a capital lease. An operating lease is a short-term lease and is cancellable, whereas a capital lease is long-term and does not come with cancellation.

How do you Make Money Leasing Equipment?

The most obvious way to make money as a business leasing equipment is being able to use your expenditure elsewhere. You can focus more money into pushing sales and you also get bonus benefits such as tax benefits. You can typically write your lease payments off as a business expenditure too.

Leasing gives the potential of upgrading the equipment whilst building equity. It can also help to build relationships with other businesses who lease. Lenders typically will offer a discounted rate to buy equipment at the end of a lease or lower rates to renew. It is important to know you are getting the most out of your money, to know the best option seek advice from an expert member of Century Business today.

How are Equipment Lease Payments Calculated?

Lenders will ask how long you have been in business for, the type of business and equipment you need and over what time period you need the equipment. Lenders will vary in leasing options from the lease period to the monthly payments. That is why it is important to know all of your options and know you are getting the most out of your money but with the best equipment. Get in touch with Century Business to access expert advice today.

What is the Process of Leasing Equipment?

The process of leasing equipment is that you are paying the equipment owner to use the equipment over a set lease period at a set lease rate. Firstly, you will need to fill out a lease application, once this has been accepted and all of the terms agreed, you will be delivered your new equipment. It is typically a fast process but it is a big financial agreement so a small amount of expert advice can go a long way.

How do I Arrange Equipment Leasing Finance?

It can be frustrating to have a vision but not have the funds to make your idea of reality happen. Here at Century Business we offer Equipment Lease Financing. We know the stresses of gathering up enough money to get that new business up and running, or the panic of not knowing if your business will survive, we take the stress away.

The need for financing

There are so many instances in which a business needs financing. Even the most experienced entrepreneurs and business leaders will find that cash flow can be a problem. It’s also a fallacy that cash flow problems only affect smaller or newer businesses because the most time-served and asset-rich firms can still experience these issues.

Why is cash flow so important?

A going concern

Cash flow keeps a business ticking over. Even a profitable business cannot stay in operation if it struggles with cash flow.

To secure finance

Cash flow allows businesses to secure finance when they need it. If a firm has insufficient cash flow, it can secure a business loan against its assets. This can then continue to flourish by using that cash flow to operate successfully. A good way to improve business cash flow is by using a business cash flow credit facility and then managing it carefully.

To attract investors

Operating cash flow is one of the key measures that investors look at in evaluating any business. Investors will look at net income and revenue too, using the three measures to identify how well a business is able to sustain revenue and to grow in the future. Remember that even a highly profitable business can fail if its cash flow is insufficient.

To manage the business proactively

When a business has cash in the bank it has opportunities to move ahead. For example, it may want to buy in external expertise, to invest in R&D, to launch a marketing campaign, to upgrade its software, to train staff and so forth. By having that essential cash, the business can move quickly to capitalise on such opportunities.

Good cash flow can support a healthy business If a business can keep a healthy cash flow, it can plan ahead for its future expenses and income and then flag up any possible problems. This forward-thinking helps to maximise profitability by allowing business leaders to put longer-term plans in place.

Good cash flow maintains a great reputation A business with healthy cash flow can pay its suppliers on time, pay staff on time and meet its financial obligations. This helps it to maintain a positive reputation which is essential in today’s challenging business environment.