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6 Benefits of Leasing Equipment Rather Than Buying

Equipment leasing can be an economically viable option to BSB leasing has several benefits, which explains why many American businesses opt to lease rather than buy equipment.

Equipment

1. Cost efficiency

Your leased equipment will create revenues you can use to pay the lease payments. This will enable you to match your expenditure to your income. In effect, the machinery will be paying for itself.

2. Preservation of working capital

BSB leasing allows you to save for allocating cash funds where they are most needed. You can use the operating money to finance crucial profit-generating ventures such as research and development, production, and marketing. You are also not required to pay taxes upfront upon acquiring the asset, but you will give monthly payments during the lease.

3. Flexibility

A lease can have many purchase options, and you can carry out easier upgrades, trade-up, and add-ons to the equipment at any time. In contrast, buying outright often has limited options since the seller is only interested in the immediate cash.

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4. More Purchasing Power

You can get more purchasing power when you lease than paying in cash or using a loan since you do not pay tax upfront. If you took a bank loan, the lender might provide only a fraction of the equipment’s total cost. You would have to cover the rest using a cash down payment as equity.

5. Financing of soft costs

You will avoid paying for initial equipment acquisition costs such as installation, freight, computer software, and initial set-up costs with a lease. The machinery owner can include such “soft” fees in the lease, minimizing your initial cash expense.

6. Easier Budgeting

You can easily customize the equipment leasing terms and purchase options to meet your budget. You may choose words that match your projected and seasonal cash flows. Besides, interest rate fluctuations cannot put your business at risk since your lease will most likely be based on fixed rates.

Businesses should take advantage of the available options when acquiring equipment or machinery. It is unnecessary to buy expensive equipment outright; instead, you could lease them for some time and pay only a percentage of the total cost.

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