Equipment leasing helps you get the heavy, specialized equipment you need for your business, with a small downpayment and lower monthly payments than typical bank purchase loans.
Major benefits of equipment leasing include:
- Preserving your cash: Leasing usually requires a lower payment because the leasing company assumes the equipment will have a specific used resale value when you turn it in (at the end of the lease). With the lease payment, you’re repaying only the portion of the equipment’s life that you’re using. Equipment leasing offers some flexibility, so you may be able to arrange to skip payments during your slow season.
- Staying up-to-date: When your lease is over, you typically turn in your old, used equipment and re-lease newer, more modern versions of the equipment. With your new lease, you’ll get more efficient equipment with the lower maintenance cost that comes with new items, plus a manufacturer warranty. (Try to arrange your lease to end when the warranty runs out.) Having newer equipment can attract employees to your company over others, increase productivity, and bring in new business.
- Growing your business: You can get part of the cash value of your equipment (to free up some of the cash you have wrapped up in it) via a sale-and-leaseback arrangement. The lessor buys the equipment from you and leases it back to you for a period of 3 to 7 years. Now, you’re using the equipment, just like you’re still the owner, but you’re getting a lump sum of cash from the sale. You can use that cash to grow your business.
- Lowering Debt: Consider refinancing with a longer lease to lower your monthly payments by up to half. The leasing company could potentially stretch your payments over a longer period, up to the point they estimate the equipment will be obsolete.
If you’re interested in enjoying the benefits of equipment leasing, contact Magis Funding to learn about financing options today.