Equipment Finance or Leasing - Which is Right for me?

Whether you’re starting a new venture, or looking for some shiny toys to invest into your current business, equipment can come with a heavy price tag. But you want to make sure that you’re getting the best option to suit your needs- one that won’t fall to pieces on the second day. So, how can we get a reliable piece of equipment, that won’t break down, or break the bank? You’ve got two key options; equipment finance, or equipment leasing. The process of purchasing equipment can be tied up in crunching numbers and tightening budgets, so you want to pick the option that will keep things simple. Business equipment finance and leasing are two great ways to easily get the equipment you need, so read on to find out which one can help you.

Leasing:

Equipment leasing works similarly to any other leasing option, such as a car. You make an arrangement to use and maintain the equipment, for a set term, and you make payments over that time. Once the period is up, you have the option of purchasing the equipment or you can return the equipment. The payments are usually rather manageable, and tax deductible, and leasing is easy to qualify for, as often the actual item being leased is set as collateral to secure the transaction. As you can now have the equipment with little (if any) down payment, there isn’t a huge chunk taken out of your cash flow- which is crucial for a small start-up. The lease payments are a business expense, therefore tax deductible, and you have the option of upgrading to a newer, shinier model when the lease term is up, instead of selling it at a loss.

The blessing of leasing is also the curse; you have to hand it back. Unlike if you’d bought it, you can’t use it to secure another loan later on. It also means you cannot make changes to the equipment which you might usually be able to make under ownership.

Financing:

When you find the right lender, equipment financing can be a viable option. It’s up to you to decide on the business equipment you need, and your lender covers the purchase cost while you pay back the sum to your lender. This equipment can be used to secure other loans, and is yours completely to own. This means that you can sell or dispose of it when you see fit, or can perform any modifications or adjustments.

When financing, remember to find an equipment finance brokers who can create an option that fits your needs and budget perfectly. Ask around, and find a lender who will develop a payment plan that won’t eat up all your revenue. Equipment finance doesn’t need to be complicated or scary; here at Allcredit, we pride ourselves on our customer satisfaction and our industry competitive rates from Perth to Cairns. Talk to our friendly team of experts about your equipment needs today, and make the most of our easy application process and speedy approvals.

I am a business Coach and Writer in Perth WA, Mom of 2 charming Sons. Cam is my name and for me Writing is Just like playing a Game.