Leasing Assets Vs Purchasing Assets
Buying assets have been the trend so far but the option of leasing has confused many business owner as to whether leasing is a viable option over buying. The biggest advantage of purchasing equipment is that it gives you the ownership and you do not have to return the equipment but today there are leasing options available that allow you to purchase the equipment at the end of the lease term by paying a fair value of the equipment to the leasing firm. Depending on your business needs, you must choose leasing or buying as both offer different benefits. Here is some information that will help you understand leasing and purchasing and make it easier for you to make the choice.
Cash Outlay and Cash flow: When you lease equipment there is no down payment i.e. you obtain the equipment without paying any kind of up-front cost. Lease also helps to conserve your working capital and allow you to utilize the cash for other business objectives. When you purchase equipment you have to pay the full or partial cost of the equipment before taking it into possession. It blocks your working capital in buying the fixed assets.
Interest Rate: The interest rate in case of lease is fixed over all the payment slots and does not change with market trends. In case of purchasing if you choose to pay the net value then there is no rate of interest but if you wish to go for installments then the interest rate may vary.
Tax Factor: You can get 100% tax remittance when you choose to go for leasing equipment. However, it is wise to consult an expert as each type of lease has different tax implications. When you buy an asset, only the interest is considered as expense.
Ownership: When you lease equipment you do not own the equipment therefore there is no risk of obsolescence, and it also gives you the flexibility to upgrade your equipment with the rapidly changing technology. When you purchase the equipment you become the owner of the equipment and have to shoulder the wear and tear cost and the depreciating value of the equipment.
Payment Options: You can choose the payment structure according to your financial position. In case of leasing, you can either go for seasonal payments, 90-day deferred payments, step down payments, step-up payments or quarterly payments. But, while purchasing, you either need to pay the entire value of the equipment up-front, or if you choose to go for installments, then you need make heavy down-payment apart from installments.
Management Cost: Lease covers 100% financing cost which means it also includes installation and maintenance cost. In case of purchase, you have to bear the overhead charges of installation and maintenance of the equipment.
Today many big organizations opt for equipment leasing due to its incredible benefits. There are many brokers, equipment leasing companies and independent leasers who provide leasing facilities but it is advisable to go for a reliable firm who has experience and expertise in equipment leasing. Blue Street Capital is pioneer in providing commercial equipment leasing solutions at competitive prices and reasonable rates. Apply Now for Equipment Leasing or CALL Blue Street at 1-866-675-1011 today!
Blue Street Capital offers:
• Heavy Equipment Financing
• Medical Equipment Financing
• Office Equipment Leasing Solutions
• New Business Equipment Leasing
• Furniture Renting Leasing |
