Benefits of Leasing Equipment by kokkulavishwanath


									Benefits of Leasing Equipment

Leasing equipment provides the lessee with all the following benefits of utilizing the equipment without
having to pay the up-front costs or assuming the risk of ownership. A lease is one of the best ways for
businesses to stay on top of the development curve. With so many new developments that occur
(particularly in the technology areas) equipment leasing is less financially expensive. Running a business
means making sound financial decisions that improve the condition and quality of a business. Equipment
leasing provides such a benefit along with:

      ased Opportunities

The minimal cash outlay allows a business to conserve their own capital. A lease also provides for
servicing equipment failures. When managing a large computer room, owning all the computer
equipment would place not only the upfront cost of purchasing the equipment, but also maintenance
and repair as needed. Businesses that conserve personal business capital and lines of credit can handle
the more mundane day-to-day expenses and unexpected events.

Budgetary concerns over new equipment purchases can be circumvented through equipment leasing.
Operating budgets tend to be more flexible than a capital budget. The lease terms can be as flexible as
required and are often negotiable on an individual basis. Lease terms are usually much longer than a
standard bank loan, which makes their payment terms even better.

The ability to upgrade remains one of the best benefits of equipment leasing. Businesses grow;
technology changes and the needs of both can change year to year. Equipment leasing allows businesses
to benefit from developments on both sides of the aisle. Lease terms may also be structured to handle
these changing situations.

Considering this multitude of benefits for equipment leasing, it's not surprising that more and more
businesses are reaching out to lease their equipment rather than purchase it. The benefits of leasing are
not limited to the computer industry or to large corporations. Small businesses can benefit even more
from equipment leasing than a large corporation may.

In a contest of leasing versus buying, leasing wins most of the time. Imagine the small business that
houses only two employees. Their working capital may afford a couple of PCs and some exterior
accounts to host a website. When a PC in the office goes down, if they are not leasing they will need to
replace the machine. In general, the cost of replacing a standard PC is significantly lower than repairing

Small businesses need the ability to remain flexible, to upgrade and to keep their machines in
maintenance and up to date. Even more than their corporate big brother, they need to know they will
remain on the cutting edge of the industry in order to make better business decisions. A small
construction company that has no access to certain types of equipment will not be able to take on more
challenging jobs. The graphic's designer that doesn't have the equipment to support the latest software
will find himself or herself less competitive. An accountant that doesn't have the disk space to maintain
growing accounts will have to turn away business.

Leasing equipment makes sense on a variety of financial levels, but also on levels addressing future
growth. The business that takes advantage of these benefits are planning two steps ahead of their own
niche market and will likely avoid being trumped by their competition. So whether a business is large or
small, thinking ahead provides them with opportunity. What is the best benefit a business can receive
from leasing their equipment? Opportunity.

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