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Venture Leasing and Equipment Financing

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Venture Leasing and Equipment Financing By Jay Murton

First, what is venture leasing? It is financing for equipment put up by venture capital investors. They fund pre-profit startups. This lets beginning companies that are growing get their operating equipment essentials such as furniture, computers, manufacturing equipment, and laboratory equipment. The companies supported by venture capital normally have a negative cash flow. They need additional equity to move ahead with their business plans. There are advantages to venture leasing as opposed to traditional venture capital. Venture leasing doesn’t have the shortcoming for the pre-profit startup that comes with traditional venture capital like board representation by the venture capitalist, investor rights, certain exit times, and big equity stakes. Venture leasing is extremely moldable. The startup lowers monthly payments by designing a fair market value purchase. Because the payments are lower, the cash flow is better and the profits higher. Another method is a renewal option. These options come into play at the end of the lease period. Because the payments are lowered and the lease costs are moved beyond the expiration of the lease period higher value is attached to the entrepreneur’s business, while the first term of the lease is in effect. This is because the entrepreneur’s startup is enabled to rake in larger profits. The entrepreneur enjoys these benefits as well: Normally, the underlying equipment secures these leases, plus there aren’t in most cases any agreement restrictions like total liens on the companies assets as with deals with banks. Banks may also have startup principal requirements. Equipment leasing companies consider one main question. Does this startup have the money to support itself during a good portion of the term of the lease? If not, the lessor won’t get all of the required payments. This is the situation if the entrepreneur goes broke because he doesn’t have sufficient venture capital. The venture lessor will make sure the investors and the company is qualified and that the business has good market potential and he’ll go over the business plan. A startup should look for the best deal. You’ll want to feel at ease with the leasing company. There has been a huge increase in venture leasing so some leasing companies of national stature practice exclusively in this niche. A capable venture lessor is an expert in this niche, usually works with startups, and is ready to aid in bad cash flow times because the business plan hasn’t been completely followed.
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Here are some additional things the optimum venture lessors do: help you get equipment at lower prices, aid in trading your old equipment, and introduce you to key partners, getting additional capital connections, and factoring. Venture leasing is a method for you to build your new company into a large enterprise. It is a great way for smart entrepreneurs to get their business rolling and have the assistance they need to become a large enterprise. It can help you attain more from your venture capital and increase the value of your business. It is an excellent financing method when used correctly. Jay Murton is a well-known business writer. He is currently exploring equipment leasing opportunities at http://www.aaaequipmentleasing.com. See more articles at http://www.aaaequipmentleasing.com/Dental-Equipment-Leasing.html.

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Is Equipment Leasing Right For You? By Jay Murton

Running a business can mean that money is tight – especially when it comes to purchasing new equipment that the business needs to be successful. More and more companies are now leasing the equipment that they need, especially when it comes to high-end equipment that is expensive and requires a big investment on the part of the business. There are many benefits to leasing the equipment that you need for your business. The most beneficial aspect of leasing in lieu of buying your equipment is that leasing does not interrupt your cash flow. When you lease equipment, you can use the money that would have been spent to purchase the equipment for other purposes. Leasing needed equipment gives you purchasing power. Because it costs much less initially to lease a piece of equipment than to buy it outright, you can select from more modern models that have more features and better brands that are more durable and do a better job. Most equipment is leased with one hundred percent financing, so there is usually not a need to pay anything down. However, if you have damaged credit, you may be required to make some type of down payment. The term of the lease can be adjusted for the needs you have – either in months or years. This will eliminate the need for purchasing equipment that you don’t use in the long run. When you lease your equipment, all maintenance risks are usually covered by the owner of the equipment. This can save you thousands if your equipment malfunctions or requires repairs that are not covered by warranty. Some leasing companies offer general maintenance of the equipment that you lease as well, all covered under your leasing agreement. You will also have the ability to keep up with technology and acquire equipment that is updated by upgrading your lease. Money spent on leasing your equipment offers you the chance to deduct up to one-hundred percent of your leasing payments as business expenditures when you file your tax forms each year. This can add up to substantial savings over the life of your lease. With a vast number of leasing companies available to service your needs, you should be able to find one that offers the flexibility that you require in leasing options. A large percentage of most equipment is acquired through leasing because of the savings that can be realized both immediately and in the long run. In sum, businesses require the ability to be flexible, which may mean upgrading equipment very frequently. Leasing equipment can be an affordable solution to allowing your business to stay on the cutting edge of the industry and allow you to meet performance goals and remain competitive. By investing just a fraction of the cost of purchasing equipment into an equipment lease, your business can hold on to more of its working capital to raise its bottom line and look better on balance sheets. With so many options available for leasing quality equipment, it makes perfect sense to lease, rather than buy, equipment for your business. Jay Murton is a well-known business writer who has been active in the business community for more than thirty years. He is currently exploring equipment leasing opportunities at

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http://www.aaaequipmentleasing.com. See more articles at http://www.aaaequipmentleasing.com/computer-equipment-leasing.htm

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Patricia Johnson Patricia Johnson Management Consultant
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