What Is Equipment Finance?

Equipment Leasing is a type of equipment financing in which the investor or lender purchases an item of equipment and provides it to the business owner in a transaction that is styled as a lease but bears many characteristics of a loan. Equipment leases may be true leases, in which the owner of the equipment and not the business owner bears the risks and rewards of equipment ownership despite the lease. 

In most cases, the owner of the equipment (lessor) will be a business, which lends out the equipment to a business owner (lessee) at a price that they see fit. The lessor and lessee will agree upon the terms of the equipment lease, including the payments and time period of the lease. Potential items to lease are relatively boundless, so long as they fit the needs of your business, and include hardware, capital equipment and even soft costs such as installations. In some instances, the lessee will work through the rental process to eventually own the equipment the lessor has provided, while in other situations the rental will simply end at the end of the leasing agreement. The equipment leasing industry is very large, and the Equipment Leasing and Finance Association (ELFA) cites businesses lease roughly $1.2 trillion in assets annually, from office equipment to software and computers. 

Why lease equipment?

Likely because of cash flow worries or other financial shortfalls, a business will lease equipment. There are several advantages to leasing equipment as opposed to simply purchasing fixed assets.

  • First and foremost, equipment leasing leaves your working capital and lines of credit free for other obligations and opportunities. Further, the down payment on a lease is often lower than one on an equipment loan.

  • With some lease agreements, you will not be responsible for certain maintenance expenditures and other costs associated with the equipment.

  • When you purchase a piece of equipment, it will need to be declared come tax season. Click here to view tax related information and the benefits of leasing qualified equipment. Leased items are often free from this, while tax deductible payments are commonplace when proving the payments are operating expenditures.

  • Finally, you avoid the risk of purchasing expensive equipment that your business will not need in the future. Most times, the agreement will only last for the term of the leased equipment's or technology's useful life.

Find Equipment Leasing

CASH@HAND, LLC is the perfect place to secure get matched with the most preferable leasing possible. CONTACT US! by calling (800) 281-9536 or email us: info@cashathand.net.  Your company will be weighed against the specifications of various lenders, including but not limited to equipment lenders, providing the most efficient and effective process available and ultimately helping to deliver the best terms for you.