Equipment Leasing vs. Financing: A Small Business Owner’s Guide
There are two options open to small business owners who need to get equipment which can be used in the normal conduct of their business, leasing the equipment, or purchasing it outright. Both options will get you what you need, but there are some advantages to each, and one or the other may be a better fit for your particular business.
Leasing a piece of equipment is roughly equivalent to renting it, in the same way that you might pay rent for your lodging. You would not usually be required to provide collateral or even a down payment, and all you really have to do is make monthly installment payments in order to retain the usage of your equipment. At the end of your leasing agreement, you’ll have a couple options, one of which would be to simply terminate the lease and walk away. But if the equipment has been reliable, and useful in the conduct of your business, you may want to purchase it at its current market value. If there’s a downside to leasing, it’s that over the course of a lease, you will generally end up paying more than the purchase price for the equipment.
Chances are you won’t have the money to put down a large sum in order to purchase new equipment on the spot, and that means you’ll have to finance the amount necessary for the purchase. It’s not usually very difficult to secure a loan for purchasing equipment, although you can expect to pay high interest rates on top of the purchase price. The downside of purchasing your equipment outright, is that you may get stuck with equipment which becomes outdated, and which may not be as useful to your business. At that point, you won’t have many options other than to try and sell it at a greatly discounted price, or continue to use it until it fails.
Equipment financing with Grey Hill Capital
When you need equipment to make your business much more productive, consider discussing it with Grey Hill Capital. Contact us today, so we can give you some options for acquiring the equipment you need for business growth and success.