Comparing current capital equipment lease rates to purchase rates how can business owners save money?
All professionals in their trade aspire to be more in their field, getting to the point where they get to choose the direction their business goes. Running your own business means you get to choose how successful you want your company to be.
You get to take that business in the direction you want, no matter what your trade is. Running a business is mainly about allocating finances in such a way that you make as much of a profit as possible, paying for the many expenses in your business and raking in a profit using those expenses.
That means balancing how much you pay for your employees, location, stock, equipment, and more with getting the best setup possible so you make a profit. For example, you want good equipment in your business, but many businesses require capital equipment which can be extremely expensive to acquire.
Paying a huge amount of money on subpar equipment isn’t ideal for your business, which is why you need an effective way to get your equipment. Many businesses look into the current capital equipment lease rates to determine the best way to get equipment into their business.
Purchasing Equipment for your Company
There are both advantages and disadvantages to purchasing, but when dealing with capital equipment, purchasing is extremely challenging to accomplish. No matter what the business’s equipment need, capital equipment usually has issues as far as longevity.
When expensive, intricate equipment is being used for a long period of time on a daily basis, the hardware tends to break down within a few short years.
That means that not only are you scrambling around funds to purchase expensive equipment for your business, but you’re also making those same payments again within a few short years when the equipment inevitably breaks.
When hardware breaks down, repair generally isn’t a good option because repair businesses are generally expensive and don’t make permanent fixes.
Getting a Bank Loan to Afford Equipment
Many businesses will attempt to use a bank loan to make affording the equipment easier, but the fact of the matter is a loan can make it worse depending on how much you take out.
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Bank loans have two main factors: the amount you’re loaning and the interest rate percentage you have to pay back. When you pay off a loan, you pay back the amount you loan with interest, and that interest is a percentage of the amount you loaned that accumulates over time.
For instance, you could have a 1% interest rate every year, meaning every year you don’t pay it off, you have to pay the loan back plus 1% of that loan for every year you don’t pay it off. The percentage can be low if you don’t have to worry about bad credit, but even a small percentage of a huge loan can be a lot of money to pay off.
And, what happens if you have a loan you haven’t paid off and your equipment breaks down and needs replacement? With the wrong loan you could seriously put yourself in a hole financially.
Current Capital Equipment Lease Rates Businesses Pay
With leasing, instead of dealing with interest rates or huge, up-front payments, you pay a flat monthly rate with current capital equipment lease rates. Equipment leases mean you can get very expensive equipment in your business in rates that are much more manageable for businesses to pay.
Leasing has quite a few different advantages: you don’t have to worry about the downsides of the responsibility of owning equipment, and you’re paying for the service of putting equipment in your business permanently, no matter what.
Leasing means you can get equipment repaired over time in a permanent manner, and if you renew equipment leases every few years you can even get upgrades on equipment. Leasing also means you can get tax benefits, putting money in your pocket on a yearly basis depending on the types of benefits offered on a yearly basis.
The current capital equipment lease rates are much more manageable for any businesses to handle, and you can shop around and get the best possible lease depending on your company situation. To learn more about the current capital equipment lease rates, click here.