The 8 Advantages of Equipment Leasing
Beacon Funding
Founded in 1990, Beacon Funding is an equipment financing solutions provider for US businesses.
Equipment leasing is a financial arrangement that allows businesses to acquire the equipment they need without the significant upfront costs typically associated with purchasing. Instead of buying equipment outright, your business can lease it for a specified period, making low monthly payments and have multiple options at the end of the term to purchase it.
In this article, we will explore the 8 key advantages of equipment leasing. These benefits highlight why equipment leasing contributes to long-term success and a popular choice for towers, landscapers, owners of screen printing and embroidery businesses, and many others.
Beacon Funding has been a pioneer and leader in the equipment leasing industry since 1990. With over three decades of experience, Beacon Funding has established a reputation for providing tailored leasing solutions that cater to your business needs.
Check Out the Details to the 8 Advantages to Equipment Leasing
Advantage 1: Budget Friendly
Spread out your expensive equipment cost into low monthly payments.
Ensuring your bills are covered by the revenue you generate each month is a top priority for every business. Finding areas to minimize expenses can free up more cash to invest in growth. Start by opting to lease equipment instead of paying your hard-earned cash.
Leasing breaks down the burden of adding equipment over a period of time into low monthly payments. The extra benefit of leasing equipment is you can use your leased equipment to generate revenue. The lower your payments and the higher your return, the more cash you’ll have on hand to grow.
Our FREE equipment financing calculator can help you visualize what equipment fits into your budget.
Advantage 2: Tax Deductions
Your business may be able to write off the lease payment each year.
Business owners are allowed to deduct lease payments on their taxes. The way your lease is structured can impact tax benefits available to you.
There are two ways you can setup your leased equipment: Capital Lease and Operating Lease. Learn about each structure, key differences, and how they can affect your tax benefits. There are key differences between each lease type.
Advantage 3: Equipment Ownership
Own equipment that pays for itself over time. Lease-to-own is also a cost-effective way towards equipment ownership. Rather than returning the equipment when the agreement ends, you can keep it when you choose from a variety of Beacon Funding’s buyout options.
Most Popular Buyout Options
Advantage 4: Flexibility
From term length to buyout options, choose the plan that allows for maximum growth and profitability.
When you have equipment added to your business, you can quickly maneuver through specific challenges. Leasing equipment paves the way for your business to incorporate the latest equipment models so you can adapt and deal with its present and future needs head-on.
Advantage 5: 100% Financing
100% financing refers to a funding arrangement that covers the full cost of an asset or investment without requiring any upfront payment from the borrower. It eliminates the need for a down payment, allowing you to acquire necessary equipment or assets immediately.
Beacon Funding offers 100% financing for well-qualified buyers looking to add equipment*. Unlike bank loans, qualified businesses can finance their entire purchase reducing upfront cash requirements.
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* All transactions are subject to written credit approval and a complete financial information package. Down payment, increased monthly payment, security deposit, and shortened term may be required based on time in business and credit quality. Several factors are taken into consideration within the credit review process. Other financing structures are also available.
Advantage 6: Maintain Liquidity
Conserve cash for when you need it most. Most businesses can’t grow quickly without outside financing. Waiting to save for new equipment can cost you opportunities and isn’t sustainable long-term. That’s where Beacon Funding’s equipment leasing comes in!
As your business grows and gains more customers, you’ll need additional capital to keep up. Equipment leasing can support your growth and avoid budget restrictions.
Enhancing liquidity is a smart way to keep cash on hand for uncertain times and build business credit for the future. It helps save bank borrowing options for emergencies, pay bills early or on time, and pay off debt.
All those goals can be achieved with the right tools and proper use. Your financing consultant can discuss how equipment financing can help your business where it needs to go.
Advantage 7: Mitigate Risk
Use your equipment to earn incremental revenue to cover your lease’s monthly payment. Instead of a large hole in your balance sheet, financing equipment spreads out the cost of the purchase. As you put your equipment into operation, you can see a positive monthly ROI faster. This aligns your finances with your operating income, thereby reducing risk.
Separate your personal and business credit. Here are four reasons why drawing a line between your personal and business finances is a good idea:
Taxes
Mixing personal and business finances can lead to disorganized and inaccurate accounting records. If the IRS audits your business, you could end up with penalties or fines if the IRS audits your business. Safeguard your personal assets from your business liabilities.
Personal Liabilities
If your business struggles, it could become risky for your personal assets and credit. The corporate veil, which refers to the legal difference between a business and its owners, is intended to safeguard the business owners from liability related to the business’ actions. However, mixing personal and business finances could pierce the corporate veil and leave your personal assets vulnerable to business debts, losses, and lawsuits.
Hassles in Bookkeeping
Establishing business credit helps keep your records separate and easy to manage. If you’ve ever had to filter through months of receipts – or analyze a year’s worth of bank statements, line by line – you will know how time-consuming and laborious a task can be.
Difficulties in Predicting Accurate Cash Flow
Having a clear insight into the funds flowing in and out of your business is essential for preventing setbacks and unforeseen cash crunches. That same financial clarity is also significant any time your business needs to:
Having clear insights into your business cashflow also makes it easier for potential lenders to approve you for equipment financing.
Advantage 8: Long-Term Profitability
By opting to lease rather than purchase equipment outright, your business can immediately use revenue-generating equipment without the need for substantial upfront capital. This ensures your equipment is in use and generates income over its lifetime, which often extends well beyond the lease period.
As your equipment continues to produce revenue, you can maintain liquidity and invest in other areas of your business. Since your initial burden of buying equipment is taken care of, your business can enjoy better cash flow management. This means your leased equipment can effectively pay for itself over time, ensuring a steady profit while keeping the business agile and financially healthy.
Choosing the Right Financing Option with Beacon Funding
When searching for an equipment financing option for your business, you don’t have to do it alone. It’s important to work with a lender who not only works with established businesses but gives start-ups a chance too.
While other lenders might deny you because you don’t fit in their financing structure, Beacon Funding has a wider credit window than most. That’s how we’re able to approve 7 out of 10 applications.
If you’re ready to get the right equipment financing for your business, apply today. Applying takes a few minutes, has no cost or commitment, and you’ll receive a response from a financing consultant within 24 hours.