Equipment Financing & Leasing
Purchase the equipment or machinery your business needs with equipment financing
Purchase and upkeep of equipment come at a cost, and often, these expensive types of equipment soon become outdated as newer, more advanced ones replace it. Since several small businesses don’t have the working capital or cash flow to be able to buy equipment at market price, they prefer to lease the equipment.
Leasing has benefits that ownership does not, such as lower monthly payments usually made over several months or years instead of paying all the money upfront. Additionally, most commercial equipment leases feature service contracts or add-on services, which give company users peace of mind and reduce the costs of needing in-house personnel.
Leasing can be an option if your company requires new technology or equipment but cannot pay for it.
What is Equipment Financing and Equipment Leasing?
When you can’t purchase equipment for the total price, renting is an option that companies or lenders provide. Renting equipment is known as equipment leasing. Equipment leasing enables you to get hands-on equipment like machines, automobiles, computers, and many more, which you would otherwise be unable to afford.
A company can lease equipment for 3, 7, or 10 years. Leasing equipment enables you to pay fixed monthly payments until the lease expires, after which you can return the equipment. Once the timeframe of the lease expires, you can either renew the lease or purchase the equipment.
Equipment leasing is not the same as equipment financing. It requires you to obtain a company loan to buy the equipment, repay it over a predetermined time frame, and use it as security. The equipment becomes yours after the loan is repaid.
Pros & Cons of Equipment Leasing
Small firms with limited resources can profit significantly from leasing equipment. Below are some benefits of equipment leasing:
- Start-up costs are minimal. Numerous leasing companies don’t demand a sizable down payment.
- Scaling is easier. You don’t have to liquidate your existing equipment and search for alternatives if you need to update the latest machinery to handle more work volume.
- You can upgrade your tools. Leasing is an excellent choice if you frequently upgrade equipment since you won’t need to utilize outdated equipment.
- It might provide tax breaks. Tax deductions are usually available for equipment leases.
There are a few drawbacks to equipment leasing, including the overall leasing payment costing a lot more than the actual total cost and the equipment ownership remaining with the lender.
Pros & Cons of Equipment Financing
In the case of equipment financing, also known as equipment loans, the benefit is that at the end of repayments, the equipment ownership belongs to you. However, monthly installments are higher than those for leasing, and the interest cost is also an added expense.
If your business needs to purchase essential equipment for its growth, look no further than Capital 1 Funding. Capital 1 Funding can help you get the equipment you need now while keeping your working capital intact. Capital 1 Funding has the best leasing terms, and you can get pre-approved in minutes with access to your funds within 48 hours.
We work to provide your business with the best terms that can help it grow and become more profitable.