Small business lease allows you to keep your equipment updated and potentially save money on business equipment purchases.
Small business lease financing enables your business to operate at peak performance levels by giving your business access to the latest and greatest equipment on the market. Without being forced to purchase the new equipment that could be become outdated quickly your business can use a lease to obtain new equipment. After the end of the lease the item is simply returned to the leasing company and you can replace it with a newer more updated model.
Leases also save your business money over the life of it because you can deduct all of the money paid on the lease, whereas with a loan you can only deduct the interest paid. It is common that the net after-tax cost for a lease is less than if you actually purchased the equipment outright yourself.
A small business lease can be great for your business, but it is good to be cautious before jumping into a lease. Most bankers don’t tell businesses going after a lease that available cash in the form of a credit line can be reduced by the amount of equipment you are leasing.
This means that you may have a $10,000 line of credit, but if you lease a piece of equipment that costs $6,000 you will only have $4,000 available for use on that credit line. This is important to understand if you had planned on using most of that credit line with startup or expansion costs. You can get around this by going after a lease from another lending institution.
To help you find quality lenders that will help you obtain a small business lease browse our business capital search engine for free.