Equipment Leasing
New and existing businesses often have to make the decision between buying and leasing equipment. Depending on the cash a business a company has at its disposal, a company may opt to either purchase or lease important equipment.
Phillip Thow is of the opinion that equipment leasing has more advantages than buying. Consider this. If your company or business relies on cutting-edge technology, it requires the latest communication devices and computers to stay ahead of competition. The devices and computers require periodic upgrading. This means money has to be spent. It makes more sense for such a company or business to lease the equipment as they will be able to cut on costs.
Equipment leasing does not require any down payments. The owner only requires that you pay one or two installments. The installments are just a percentage of the equipment's total cost. Phil Thow considers equipment leasing to be inflation friendly. This is because the same interest rate is charged for both long and short-term leases. Still, the biggest advantage of equipment leasing lies in the fact that you are allowed access to highly advanced equipment at a reasonable cost.
Once the lease has expired, you are simply required to return the equipment to the owner. The situation is different when you have purchased the piece of equipment. Philip Thow posits that if the equipment is obsolete, you are then stuck with the burden of selling or disposing it off. Equipment leasing offers payment plans that are flexible and that suit the operational requirements of your business. The advantage of this is that it allows to effectively balance your company/business' cash flow. It is for this reason that Phillip Thow recommends leasing equipment.
According to Phil Thow, equipment leasing is the ideal solution companies and business that are just starting out or are diversifying. This is because it enables them to acquire necessary equipment without large initial investments. Some of the equipment ought to be periodically upgraded, something that new companies may not be able to do because of budget constraints. With leasing, you have the option of structuring the lease plans so as to integrate maintenance and upgrading services.
If your business requires new equipment, consider leasing. You will spend much less than if you decide to purchase.
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