Leasing is a smart business decision, especially when your company’s market is constantly changing and advancing. The upfront investment of purchasing large and expensive equipment can tie up your cash flow for a long period of time. If you’re a business that may have limited capital or needs new equipment frequently to stay competitive, exploring your leasing options may be more beneficial.
4 Benefits of Leasing Your Manufacturing Equipment
1. Structure Payments to Fit Your Business
Leasing manufacturing equipment preserves your business’s cash flow for those unexpected opportunities or emergencies. You can structure your payments so you’re paying only when you generate revenue, whether that’s monthly, semi-annually, seasonally or annually.
2. Free Up Cash for Opportunities
Breaking up the cash expenditures over a large time period can benefit your business by freeing up available cash for other business purposes or opportunities. Think of leasing this way: your immediate costs decrease and your cash flow increases.
3. Tax Benefits
You can experience tax benefits* with a tax or capital lease. Tax leases give equipment ownership and depreciation benefits to the leasing company, so your monthly payments are then fully deductible. A capital lease is another option structured to pass all ownership benefits to you, including depreciation. Your lease can be customized to meet tax objectives or have fixed rates for their term, as well as no down payments and 100% financing.
4. Stay Competitive
Technology is constantly advancing and causing older equipment to become outdated and less competitive. While a purchase means you’re stuck with your equipment for years as it depreciates, leasing may provide an opportunity to regularly trade-up your equipment thanks to its high resale value.
If your business needs to keep up with advancements in the marketplace, or you want to maintain more liquidity over time, leasing might be for you. Our experienced lenders can help you find the perfect agreement to fit your business needs.
Lincoln Savings Bank, Member FDIC
Lease and all related servicing is provided through partnerships with other lending institutions.
*Always consult with your tax professional.