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Equipment Leases- Advantages Of Equipment Leasing For Your Business
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Equipment Leases- Advantages Of Equipment Leasing for Your Business

In general, it would probably be accurate to say that there is a fair amount of confusion for businesses regarding equipment leases. However, the fact remains that for many businesses seeking capital and infrastructure improvements, equipment leasing, usually with an option to own the equipment at the end of the lease term is a viable alternative to borrowing the money outright, and offers a layer of added flexibility that a traditional loan may not.

So what is Leasing? – In the context of a business, leasing is the a financial mechanism by which to acquire needed physical assets of almost any type; computers, office furniture, heavy machine tools, medical equipment, etc.

The way a business gets a lease is to find a leasing company or partner and establish a relationship and get qualified for the lease. They will review the company’s financials and ability to make monthly payments, the type of equipment to be purchased as well as the amount needed to purchase it.

Once you have established how much of a lease you qualify for, a business can go out and get the equipment or gear they may need. One of the biggest advantages of leasing rather than buying outright is that you usually will only have to provide two monthly payments upfront. These payments act as a sort of “downpayment” on the lease, but will also count toward paying off your lease.

Once the equipment is found, a purchase order is forwarded to the leasing company and then the leasing company will pay the vendor for the equipment. The leasing company technically owns the equipment while the company who is paying the lease gets to use it. Normally, a lease term will extend out ranging between 2-5 years depending on the contract and size of the lease.

The company that is leasing the equipment will pay on the lease each month until the end of the contract. At that point, when the lease agreement is completed, ownership of the equipment usually reverts to the company which leased it by means of a “lease buyout” for a small amount of money.

There are a number of other advantages associated with leasing that can provide a real alternative in today’s credit restricted business lending environment. For more information on how this financing method may help your business, check out the link below.


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