How Equipment Leasing Can Improve Cash Flow
Equipment leasing can improve cash flow in many ways – by keeping your costs minimal upfront, you can ensure that your business has access to capital that can be used for a variety of other needs.
From marketing, additional equipment, to operations, expansion and more, you’ll have the extra cash you need and won’t have to spend huge sums of money on a down payment for equipment purchases, which can often drain your business savings.
Many equipment leases have flexible payment terms with minimal to no down payment, so that you can get the equipment you need while still having access to much of your cash.
It often doesn’t make sense to tie up your cash
When purchasing equipment, you often have to tie up large sums of cash in the down payment, which often doesn’t make sense for many types of businesses.
When your cash is tied up you have less available for paying vendors, bills, for marketing expenditures, etc. The down payment for many types of equipment can also be substantial and drain your accounts. This isn’t necessary when leasing is an option.
Smaller payments per month
Many lease payments are significantly smaller than financing payments per month, allowing you even more flexibility with your cash flow. The payments can be significantly lower than financing payments.
This can be very important when you have a relatively tight monthly budget, or when launching new operations or a new business.
While paying as little as possible for equipment, you’re able to utilize it as needed to expand your business and generate a healthy cash flow.
Add a minimal monthly payment to minimal to no down payment, and the cash flow advantages are clear.
Once your business has maximized the value of its newly leased equipment and generated enough cash, it can make sense to finance equipment the next time around, especially once you are familiar with the level of revenue that the equipment can generate and can justify a purchase with detailed financials.
Easier budget management
When you own equipment, you have to track a variety of expenses, depending on how complex and costly the equipment is. Some types of equipment have multiple maintenance requirements and require you to set aside a separate budget for that, along with still having to take care of the monthly payment.
When leasing equipment, you are typically buying new equipment that is warrantied (depending on the circumstance), and as a result you aren’t required to have a separate account for maintenance expenses. Your cost of ownership is simply the monthly lease payment, which can greatly simplify your budgeting.
If you are looking to improve cash flow for your business, Call us today at 1-800-978-8817 with your questions about equipment leasing.