The Advantages of Equipment Leasing
Having the right equipment is a must for running a business, but actually buying new equipment outright can get expensive. Fortunately, there is another solution available in the form of equipment leasing. Here are just a few benefits of acquiring your company’s machinery and supplies in this manner.
The biggest reason to lease equipment instead of buying it is because it is usually more affordable. Buying new equipment generally requires a large upfront payment, which can all but cripple a small business that might need to allocate its funds elsewhere. Meanwhile, equipment leasing will allow you to make smaller monthly payments instead of paying for everything in one lump sum. Even though your leased equipment may not be that much cheaper in the long run, the fact that you don’t need to pay for everything at once allows you to have more cash on hand to cover other expenses.
Depending on what equipment you lease and how much it costs, you might qualify for the Section 179 tax deduction, which could allow you to expense some or all of the cost of your lease. Only equipment you’ve leased in the past year is eligible for this deduction, and the limit for the deduction is $500,000. Ask your accountant to see if your business qualifies.
When you purchase new equipment outright, you are more or less stuck with it until you decide to sell it or discard it in favor of newer equipment. This obviously isn’t very cost-effective, but leased equipment can usually be traded in for upgraded models when your lease is up. You need to make sure that this is part of your lease, but you will hopefully never be without the updated equipment that your business needs.
For more information about equipment leasing and how it can benefit your business, contact Anmarc Business Capital at 410-995-8925 today.