Equipment leasing is a great tool for small business owners who wish to grow their businesses without burning their cash flows. Business equipment leasing is a form of alternative financing that is used for leasing special equipment needed for your business. However, it does not take care of other expenses that you may incur in your business.
Business equipment financing amount may vary from lender to lender; however, typically, it lies between $25,000 and $2 million. Different alternative lenders offer different leasing terms, so be sure to understand from your lender the repayment terms and other details. Usually, the terms of alternative online lenders such as Mantis Funding are flexible so you can negotiate according to your requirements.
Benefits of equipment leasing
If you're in a business that requires expensive equipment, but at the same time, you face a cash crunch, then equipment leasing can be the best solution for you. It helps to keep your cost down, does not interfere with the cash flow, and at the same time, you get what you need to keep your business competitive. However, consider your requirement before deciding on equipment leasing.
For example, if you're expanding your business and you're going to have a handful of employees who will need computers to work on, equipment leasing may make more sense. But, if you need just a single computer, it makes more sense to buy it than leasing out. Plus, the repayment of business equipment leasing is usually monthly or quarterly.
The biggest advantage of equipment leasing is the monthly payouts that are usually more affordable than buying or financing the equipment outright. The financing rate is usually fixed, unlike a floating rate in the traditional financing system. You get tax benefits, you get to conserve your working capital, and most important of all – you get access to your required tool almost immediately as the waiting period is negligible.
According to the Equipment Leasing Association of America, approximately 80 percent of U.S. companies lease some or all of their equipment, and there are thousands of equipment-leasing firms nationwide catering to that demand.
You need to keep in mind that your leasing decision is personal and unique to your given circumstances and business environment. Hence, it is important to partner with the right lender (Do check out Mantis Funding reviews to get a fair and balanced view of their financing ecosystem), you must also study the leasing agreement well and scrutinize all your options before you make a decision.
If you have decided to take a lease, opt for a closed-end lease, whenever possible. This means when the lease period is over, you can just hand over the equipment and walk away. But again, it entirely depends upon your business requirement. If you're going for an open-end lease, do remember to check if you need to pay any additional charges for wear and tear.
Mantis Funding offers cash advances of different sizes to help you take your business to the next level. And the best thing is their funding is not based on credit scores or collateral.