Leasing equipment works particularly well in a business where technology is constantly changing. Purchasing equipment that will become obsolete in a few years is a problem that can be avoided by short-term leases that allows you to update your equipment at the end of the lease.
If equipment needs regular maintenance or breaks down easily, a lease with maintenance and repair included can be preferrable to purchasing the equipment outright using a bank loan and paying for maintenance and repair on top of the debt payment.
A great example of this is the acquisition of Computers.
Many companies that must upgrade computers are choosing to lease their computer equipment rather than purchase it outright. Applications and media are becoming more and more sophisticated and placing increasingly greater demands on computer and networks.
When you lease any equipment, you can deduct the full cost of your lease payment in the year in which you make it. For some companies, this can be as a result in greater cashflows in the early years of the lease than the company would realize had they purchased the equipment outright. Plus, the cherry on top is the company/business is not tied to the equipment. They can upgrade as often as their needs allow/dictate.
Another example is of copier machines. Copier machines depreciate over time. If your business purchases a copier, you can upgrade in technology by investing in a new one. In contrast, most copier lease agreements have options to upgrade the copier at a predetermined date. Such lease agreements enable your business to always be in line with the latest technology. This also avoids obsolescence. In this light nobody wants to be stuck with old or obsolete equipment: it is often of a hinderance than a help, limiting your workforce’s ability to get the job done and potentially missing out on new business.
EQUIPMENT FINANCING VS LEASING
Equipment financing and leasing are 2 great ways to acquire equipment. They both give you access to the hard assets you need, but they differ in the structure. Equipment financing is easier to qualify for than traditional loans because they are self – collateralized. The equipment being purchased secures the loan.
INDUSTRIES THAT BENEFIT FROM EQUIPMENT LEASING
If your business is in one of these industries and you are not utilizing equipment leasing, you may be missing out on opportunities to grow your business.
Information Technology:
In IT, technology is the prevalent factor in the business. IT businesses be it large or small can benefit from IT equipment leasing because it will allow you to purchase additional equipment or more up-to-date equipment that will help you serve your clients more quickly and efficiently.
Restaurants:
Restaurants of all types require different kinds of equipment to operate efficiently. The equipment that is a part of your restaurant can dictate the quality of the food and beverages you are producing and how quickly it can be produced. With restaurant leasing, you are financing your business.
Printing:
Industrial printers are capable of printing much larger products with higher precision and a wider range of materials. A machinery/equipment lease can be used for industrial printers or upgrade with a printer lease to meet the growing needs of your market.
Farming & Agriculture
Farming and Agricultural businesses are considered to be the backbone of most economies. Farmers and agriculture equipment is what farmers and all other agriculture-based business rely on to grow and harvest crops, as well as raise animals that we rely on for nutrition.
While not all farmers and agricultures need every type of equipment available on the market, they can use an equipment and machinery lease to acquire the large equipment on the market, they can use an equipment and vehicular equipment that allows them to harvest fields of crops. This allows farmers to match up the equipment leasing payments with their incoming cashflow.
Leasing Medical Equipment.
As medical technology continues to evolve, the need for health facilities to adapt to changing trends increases. This is because advanced medical equipment facilities the efficient delivery of services compared to outdated equipment. It also reduces referrals, as medical practitioners can handle most health cases
Purchasing medical equipment can be costly for any organisation to acquire. Through leasing, medical facilities can acquire up-to-date equipment.
When you engage RentCo Africa Ltd on your medical lease equipment we manage all the repairs and maintenance, which reduces overall costs and saves you money.
There are a number of different types of leasing arrangements available, and the right one for your business will depend on a number of factors, including the type of equipment you need and how long you need it. Here’s a look at the different types of equipment leasing programs available to small businesses:
Operating Leases
An operating lease is the most common type of equipment lease. With an operating lease, you make regular payments over the term of the lease, but the equipment remains the property of the lessor at the end of the lease. Operating leases are typically used for short-term leases of less than five years.
Capital Leases
A capital lease is similar to an operating lease, but at the end of the lease term, you have the option to purchase the equipment for a predetermined price. Capital leases are typically used for leases of five years or more.
Finance Leases
With a finance lease, you make regular payments over the term of the lease, but at the end of the lease, you own the equipment. Finance leases are typically used for equipment that has a long useful life, such as real estate or vehicles.
Tax-Advantaged Leases
There are a number of tax-advantaged leasing arrangements available that can provide significant tax benefits for your business.
RentCo Africa is well versed in the leasing of any state-of-the-art equipment to carry your business to the next level!
