Lease, don't buy, for business savings

For many fledgling companies and small businesses, the costs involved in purchasing new equipment can make a large dent in their budget. As a result, some companies may be reluctant to expand and could lose out on valuable business. But therein lays the quandary: do companies speculate to accumulate and risk financial ruin if plans go awry or play safe and make do with what they've got, however small their market share?

For companies that are looking to acquire new equipment without the hassle or upfront costs, equipment leasing could be the answer, allowing businesses to pass on the expense. Equipment leasing works by a third-party funding source (the lessor) purchasing the equipment initially, and then leasing the equipment out to businesses who require it in exchange for a regular payment according to the terms that are agreed upon, such as lease duration, number of leased equipment and so on. Equipment that can be leased can incorporate everything from industry vehicles to IT equipment to fully equipped office space.

Companies can save big by leasing equipment rather than buying, with both immediate and long-term savings to be made. Firstly, instant savings are made as businesses won't need to use their capital or credit so spending tens of thousands of dollars to outfit an office can be condensed into a manageable monthly payment with the same end result. You'll still get everything you need, plus you'll have avoided tying up your credit or cash, which can then be used to cover other parts of your operation. Secondly, long-term savings come in the way of annual tax benefits and interest accrued on the money you didn't have to spend equipping your business.

Equipment leasing also gives you the opportunity to be constantly updating. This means an immediate gain of always having access to the latest technology, as well as a long-term benefit of not having to worry about your equipment becoming outdated. Plus, by using business equipment leasing as a financial tool, you can be updating your technology every couple of years without the need to worry about having to dispose of your out of date, depreciated or obsolete technology.

There are many companies, such as Capquest, that specialise in equipment leasing for a number of business areas, so the next time you're thinking about upgrading your business' equipment it might be a good idea to check out leasing opportunities before you buy.

Martin McAllister is an online, freelance journalist from Scotland whose hobbies include rock-climbing and skiing.