Whether you are starting a new business or have been running your company for many years, a primary component will be how to handle your business equipment. There are many considerations to planning business equipment financing, including acquisition, recurring maintenance, and replacement. When preparing for equipment acquisition, you have choices of purchasing or leasing. Here are some advantages to pursuing equipment leasing.
You Need to Consider Cash Flow
As a business owner, you would like a financial sheet showing no loans or other financial commitments to lenders. However, finding a balance between using cash, loans, and leasing can create tremendous flexibility for equipment acquisition and company growth. There should always be cash on hand for emergencies. As the company forecasts future sales opportunities, leasing equipment can provide the tools to ramp up to meet and sustain customer demand. Leasing can offer low-cost financing and tax benefits.
You Need to Consider Maximizing Profits
If you decide to execute a straight purchase, you must perform due diligence to evaluate multiple potential sales partners. Once you have chosen, you have a waiting period between the order submission and when the equipment is delivered and set up. Depending upon the market supply and demand, you may have to wait for an extended period, taking time away from potential profits. A decision to lease the equipment will provide a unit that is available and ready for use. Your production time will start sooner compared to purchasing the equipment.
You Need to Consider Equipment Lifecycle Management
Managing your equipment will present many challenges. You need to have personnel who can fix issues, and you need to make sure you plan the budget for training the personnel. People leave companies for new opportunities, and technicians are no different if someone offers them more money. Leasing equipment will ensure you have a working piece of equipment, and you can transfer the maintenance and training responsibility to the leasing organization. Replacement of the equipment as it ages will be a smoother and quicker transition through leasing.
As a business owner, you need to decide what is best for your company, but ensure you understand all the advantages equipment leasing will offer you for your future growth. Employees will always be your greatest asset for your investment, but equipment needs to be an equally strong consideration. Giving your employees the latest and greatest equipment puts them in a position to succeed, and leasing is a proven way to meet this goal. Contact Latta Commercial Capital today to learn more about our comprehensive equipment leasing solutions.