Why are businesses increasingly opting to lease a wide range of equipment and technology rather than purchase it outright? Here is a list of eight benefits companies of all sizes can enjoy by arranging a flexible lease agreement with a reputable leasing partner.
1. Keep up to date with technology
As any business grows, its requirements change and keeping up with the latest equipment or software can be an expensive challenge. With leasing, equipment can be added or upgraded at any time during the lease period without having to repurchase, so you will always have the most up-to-date and efficient equipment.
2. Improve cash flow
Leasing can help improve your cash flow by keeping your working capital free. This leaves you with funds available to reinvest elsewhere in your business.
3. No large capital outlay
Using a leasing scheme, businesses enjoy the obvious volume advantages of ordering equipment in bulk, but without the disadvantage of having to pay for purchase upfront.
4. Instant return on investment
For a small initial payment, the asset you require is yours to use straightaway. Leasing enables you to pay for the equipment you need over a fixed period of time, which helps you spread the cost over the life of the equipment and budget effectively.
5. Tailored agreements
Agreements can be over an agreed period, for example two years, and repayments can be made monthly, quarterly or annually, by direct debit or invoice, whichever is most convenient. Lease payments can even be tailored to match your seasonal cash flow.
6. Total flexibility
Leasing offers the flexibility to acquire the latest equipment your business requires straight away or quickly respond to an opportunity in the market. It prevents having to delay the implementation of plans until sufficient funds become available, enabling new technology to be adopted immediately.
7. Considerable tax benefits
Lease rental payments can qualify as a business expense that can be set against profit – thereby potentially reducing your tax bill. Outright purchase does not offer the same level of tax benefit.
8. Accurate budgeting
With leasing you have a fixed interest rate. This protects you against interest rate rises and enables you to plan your budget effectively. And as inflation rises, because your payments are fixed, the cost of the equipment reduces in real terms.
For more information, download WestWon’s free Essential Guide to Leasing for Business.