The Top Three Advantages to Equipment Leasing
Whether you are running a commercial kitchen, an excavation company or a 20,000 acre farm, having the right equipment to get the job done properly is essential. Unfortunately, the right equipment can be expensive and difficult for business owners to purchase and maintain. Equipment leasing can free up cash, allow your business to use up-to-date equipment, and may qualify as a tax deduction.
Experienced business owners know how valuable working capital and predictable monthly expenses are. By equipment leasing, businesses are able to make monthly payments over a set period of time instead of purchasing the equipment all at once. This can help keep your cash free for other expenses while still allowing you access to the equipment you need. At the end of the lease you can opt to either buy the equipment or sign another lease and update to new equipment.
Running a business can be stressful. There are bills to pay, customers to satisfy, employees to take care of, and a job to be done. By equipment leasing, it is possible to reduce the amount of downtime caused by old equipment malfunctioning or breaking down. Leasing also ensures you will have access to some of the newest equipment and technology to make doing your job that much easier and more efficient.
For example, many trucking companies use GPS equipment to track where shipments are and update estimated arrival times. This equipment is often leased. The software is maintained and updated regularly by the company it is leased from. This allows the trucking company to do their job effectively without the added expense of keeping their equipment and software updated, as this is usually taken care of by the leasing company.
Possible Tax Deductions
Depending on the type of business you own and the equipment you are using, leasing may qualify you for a tax deduction. Section 179 provides a tax deduction for leased and financed equipment, vehicles, and software. If your lease agreement is properly written and you qualify for a full deduction, your deduction may actually be larger than the amount you spent. This not only helps you as a business, it also improves your bottom line.
There are many advantages to leasing the equipment you need to help your business function. Not only does it make your financial planning a little easier, it ensures you always have access to the newest technology and equipment, and may qualify for a tax deduction as well.