Although a small business owner may mainly enjoy the cost-effectiveness of equipment leasing, other benefits exist as well. In addition to reducing overhead costs, leasing equipment also offers small business owners greater ease and flexibility. A recent Entrepreneur article outlined what advantages leasing equipment can offer small business owners.
Lower short-term costs
When a small business owner leases a piece of equipment instead of purchasing it, he or she is relieved of the pressure of having to pay the full price up front. Most small business owners know that effective tools make the workday run more smoothly, which bolsters productivity. Using equipment that is up-to-date may also prevent accidents and reduce the risk of injuries at the work site. Investing in higher quality items also curbs costs that could arise from the equipment breaking down, working inefficiently or wasting energy. Acquiring top-of-the-line equipment, however, is usually expensive. The option of leasing offers business owners a way to gain access to the latest technology and models without having to pay the hefty price tag.
Equipment leasing is a popular option for many industries that rely on having cutting edge devices. The medical and dental industries, for example, often lease their equipment to stay abreast of rapid technology developments. In fact, Global Industry Analysts (GIA) recently released a report that revealed the global market for Medical Equipment Rental and Leasing will increase to $56.8 billion by 2018, due to the high cost of tech upgrades and shrinking budgets.
Ease and efficiency
Traditionally, it is easy for small business owners to get approved for a lease. Leasing frees up a business owners’ lines of credit, so he or she has more credit available to use elsewhere.
Leasing equipment also makes it easier for business owners to make upgrades. As technology is always evolving, many tools used at the worksite become outdated quickly. Rather than having to buy new models every couple of years, a business owner who leases may easily exchange older equipment with newer technology once the contract expires.
Thanks to Section 179 of the U.S. tax code, business owners can deduct up to $500,000 for equipment leased during 2013. However small business owners must take advantage of the change in the tax code, as the deduction amount of Section 179 is set to be drastically reduced in 2014.
Small business owners who are interested in leasing equipment to keep their company running efficiently and cost-effectively may contact National Funding to learn about the many lending options available to them.