Equipment LeasingEquipment Leasing is acquiring the use of vehicles, machinery or other equipment on a rental basis in order to avoid the need for investing capital. Get the use of the machinery you need without having to deal with the burden of ownership. All kinds of equipment can be leased, and the kind of business you are in and the type of equipment you use can be a big determining factor.
In many businesses, equipment is the foundation that will help your business stand on its own. You may need equipment to help you serve your customers, to outwork rivals or to operate at a better level than your competitors. This often means that you will need to obtain the best commercial equipment available. Sometimes, it may be best for you to lease your equipment in order to spend the remainder of the cash on other essentials. At EML Capital Group, we are familiar with the processes the would help business owners acquire/lease commercial equipment.
Equipment Leasing and Financing Advantages
It may seem like a complex process to make a decision regarding spending your borrowed capital to borrow equipment. However, leasing equipment can free up some cash that can be used in other aspects of the company. It also is less of a headache, reducing risk and providing financial stability.
The benefits are that you make lower monthly payments than a loan, get fixed financing rate, tax benefits, conserving working capital, avoid high down-payments, and getting access to the most up to date tools needed in business.
Equipment Leasing vs. Other Financial Options
Buying is not the only alternative to leasing equipment. In fact, it's not even the most common. Loans, Lines of Credit, and Factoring are more popular means of financing equipment as well.
Loans provide more ownership of the equipment, as opposed to a lease where the lessor holds the title to the equipment. A Loan enables you to retain the title securing the purchase against existing assets.
A loan places more importance on the business' credit score. That can make it difficult for small businesses to get approved. Unfortunately, terms are a major drawback for a loan. While a lease provides fixed-rate financing, a Loan or Line of Credit may change throughout the loan term. This makes it difficult and problematic to budget depending on the loan size. Additionally, banks and lenders usually require a larger down-payment. Factoring is also an alternative to buying expensive equipment and is often faster than applying for a loan. By use of factoring, businesses can leverage their accounts receivable and quickly turn open payments into cash.
Benefits of Working with EML Capital Group
Here at EML Capital Group, we have all those options ready at your disposal, and your funding specialist will go over the different options to see what will work best with your business and situation. We are not a computer algorithm, we will work hard to get you the best option.