Can your company take advantage of typical equipment lease rates, or are you better off purchasing equipment?
Every business has the struggle with getting the best initial setup possible, especially when everything in starting up a company is based on finances. If you’re a gym, you’re focusing on purchasing the building and all of the machinery that goes with it, along with paying for employees and other various fees that tend to pile on.
If you’re a restaurant, you’re struggling with getting money to furnish your building and get the entire cycle of running a food business set up. There are countless other examples in businesses, but many of them reach that same bottom line: they need good equipment to keep running, and they can’t overspend on it.
Businesses don’t want to drain all of their funds just on one part of their business when there are so many other factors, but with an expensive equipment demand in fields like farming, delivery, and more, they don’t have many options. Alternatives to straight purchasing the equipment are to either get a bank loan or to get a lease on the equipment.
Comparing your options, is it better to get a loan and start up your company to pay it off or to pay typical equipment lease rates and get the equipment loaned to you?
The Process of Purchasing Equipment for a Company
Many businesses will attempt to purchase equipment because they think they can handle the expenses, and some businesses can: not all companies need heavy duty, expensive hardware. However, for those who do, they will oftentimes run into typical equipment-related problems, but with this equipment the stakes are much higher.
All hardware will wear down over time to the point where it doesn’t function to optimum capacity, or doesn’t function at all. Repairs are required here, and repairs aren’t free or permanent.
Usually, equipment will be repairable the first couple times, but there comes a point where repair cannot work, or it’s not fiscally wise to repair the equipment anyways, and even for heavier equipment this doesn’t take too long. At this point, replacement is necessary, and with higher class hardware, this isn’t easy, especially when your business is still relatively new.
Many businesses also get saddled with outdated equipment, which can also be an issue over time, especially if your competition is stealing all the customers with the newer setup. The downside to replacing equipment you’ve already purchased is not only the high costs, but also the fact that, if you took out a bank loan and haven’t paid it off yet, you’re getting set back yet again, and your debt only goes up more.
Leasing and Typical Equipment Lease Rates
The big catch business owners see in leasing is the fact that they don’t get ownership of the equipment, but when you’re just starting, ownership isn’t really a necessity. The important thing is getting your business started up in the wisest way financially, and that’s why a good lease can be helpful.
Typical equipment lease rates are just flat fees every month throughout the contract period, and issues like repair and upgrades are handled for you, making your life easier as far as responsibility for equipment.
The advantage to leasing is that you get to free up all of that money you were forced to spend on expensive hardware and pay for all of the other parts of your business, allowing your company to get a better chance at being successful while still getting well running equipment.
Typical equipment lease rates easily allow businesses to save money, but rates do vary as far as the lease you get, so make sure that you know what you want out of a lease before you actually get the lease. Business owners want specific leases with certain reasonable rates and a specified contract period, and you want your own type of lease that’s best for your company.
Leases can offer you countless advantages, from saving money to getting the best equipment possible and more. To learn more about how your business can take advantage of typical equipment lease rates, click here.