Equipment Lease Financing: A Sound Alternative

2007-03-08 10:33:40

( Real Estate )



Equipment lease financing is the perfect alternative for those businesses that want to cut down on costs, and do not have enough funds to purchase new equipment.

With equipment lease financing, certain equipment can be leased out by equipment leasing companies for a monthly fee, which would only be a fraction of the cost of purchasing the equipment.

There are also equipment leasing companies that can even buy the equipment of your choice should it not be available in the company’s inventory. At the end of the contracted lease period, your business can be given the option to purchase the said equipment equal to the estimated current market value, extend its lease period, change the equipment that you have leased, or opt to return the equipment that was purchased for your business.

Although the cost of equipment lease financing can be more expensive that obtaining financing from a bank, the monthly payments that you make are considered as a business expense, which can be deducted from the business income taxes you pay each year.

Looking for equipment leasing companies is not a difficult task, and can be easily found on the Internet. You may have difficulties in trying to choose one company that will serve your needs because of the numerous companies that you will find. To help narrow down your choices, you should obtain various quotations from equipment leasing companies. Deciding on the leasing company that offers you the lowest rental price should not be your final deciding factor; there are a number of other factors you should consider:

If you intend to lease equipment for a long period, you should negotiate for a lower price in proportion to the length of your rental period.

It is important to find out the terms and conditions regarding early termination of your lease. Try asking whether the leasing company will allow you to terminate your contract in exchange for a termination fee. If the leasing company agrees, you must find out how much it would cost your company.

It is also worthwhile to find out whether the equipment lease financing agreement will give you the right to purchase the equipment that you have leased, should you opt to do so at the end of the lease period.


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