Buying tons of equipment for your new company can be expensive. That is why many business owners choose to lease their equipment instead. Read on for more details about equipment leasing.
Qualifications
Leasing is not just for start-up founders. Even if you have a well-established business, you should qualify for equipment lease financing. Some lenders only lease equipment to companies that are at least two years old.
Before you get approval, you will likely have to submit financial information to the lessor. Some companies only lend their equipment to individuals and businesses with great credit.
If you have poor credit, you should still be able to find a lessor willing to give you a chance. You may have to submit a written statement explaining your credit history, however. Even a prior bankruptcy filing may not be disqualifying.
Benefits
There are many reasons to lease rather than purchase equipment. For starters, equipment leasing is often a cheaper option. You will not have to make a down payment, and you can often pay your lessor in installments. The lessor should set the terms of the repayment based on the state of your business at the time of the borrowing.
Leasing equipment is thus ideal for newer businesses with smaller budgets. You can take the money you save on equipment and use it for advertisements, supplies, and salaries. Even if you own a larger, older business, it should still benefit from an increase in working capital.
You should also get your equipment more quickly if you lease it instead of buying it. Purchasing equipment can take months, especially if you need to apply for a loan first. Obtaining a lease is much faster and easier.
Process
Once you decide to lease equipment, it may be tempting to submit your application to multiple companies. However, if you get rejected by one lessor, the other lessors may also question whether lending you equipment is a good idea.
You are better off applying to one leasing company, particularly one that specializes in the type of equipment you need. Research the lessor ahead of time to find out exactly what paperwork is required. You will likely have to submit a lease proposal along with tax returns and other financial statements.
If you do not want to deal with the cost and hassle of purchasing equipment for your business, then you should consider renting the equipment instead. The equipment leasing process is easy, and companies of all ages, sizes, and financial status should be able to find potential lessors. If you need equipment for your business, contact Latta Commercial Capital today.