The success of your factory or shop depends largely on industrial machinery. Use of advanced equipment can result in improved productivity, efficiency, quality control and customer satisfaction. However, high end equipment and machinery can be very expensive. Raising enough capital for purchasing these equipment can be quite difficult especially for small business owners with limited resources.
Leasing industrial equipment is a great option for small businesses with limited funds. Reports suggest that nearly $ 5 billion worth of industrial machinery is leased annually in the United States. What is equipment leasing? Equipment leasing is the ability to possess a piece of equipment for a fixed period of time rather than making upfront payment for purchasing it from market. An equipment lease is a rental agreement where the ownership of the asset is maintained by the lessor and the lessee uses the equipment for business purposes. An application for a lease less than $100,000 is usually is as simple as a credit card application. However, leases for an amount exceeding $100, 000 require detailed financial information of the company.
Leasing high end equipment offers several benefits over other financing oak vs cherry cabinets options. Here are few benefits of leasing industrial machinery:
Improved Cash Flow: Equipment leasing has made the process of obtaining advanced equipment very easy. It allows the start-up businesses to get on their feet without going into debt right away. It enables you to acquire and utilize equipment without making a down payment. You require to make minimal initial investment to acquire the machinery. You can use the income producing equipment by making fixed low monthly payments. It helps you to preserve your capital and maintain a steady cash flow. You can use the fund to meet the expenses of day to day business activities.
Free Credit Lines: Leasing of advanced equipment enables you to keep your credit lines free. Opting for equipment leasing is like having a secondary line of credit. It also allows you to plan out a budget and maintain your finances.
Upgrade Your Equipment: Leasing machinery also allows you to upgrade the existing set of food processing industry analysis equipment. It enables you to address technological obsolescence and beat competition.
Tax Advantages: An equipment lease agreement also enables you to secure tax benefits.
Customized Payment Structures: Equipment leasing companies usually offer a wide range of leasing packages and payment structures. You can choose a package depending on your specific needs.
There are few things to keep in mind before signing a lease agreement. Make sure you have chosen a reputed equipment leasing company. Also, thoroughly go through the terms and conditions of the lease contract. In case you are new to the process, it is preferable to seek guidance from an expert to safeguard yourself against fraud.
