Equipment Leasing Blog

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Thursday, January 27, 2011

Which Equipment Leasing Program is Right for You?

In addition to other numerous equipment leasing benefits, financing programs are available so you can acquire the right equipment at the right price for your business. There are advantages and compromises for each option, so much of the determination should be based on:

  • The amount of capital your business starts with and the expected cash flow throughout the equipment leasing program.

  • Whether or not your business experiences cash flow fluctuations throughout the year or during the leasing term

  • The monthly payments you can afford (use our Equipment Lease Calculator to determine an approximate monthly payment based on lease terms and equipment cost).

  • Whether or not your organization is tax exempt
Lease Purchase Option

If your business intends to retain the equipment you lease at the end of the lease term, a lease purchase option is likely your best choice because your payments are going toward acquiring the leased equipment. Though your business will be subject to higher payments, you can own the equipment for a flat $100 buyout at the end of the equipment leasing term. This option enables your business to keep the equipment and continue to use it, retain it and trade it in for upgraded business equipment, or sell it.

Operating Lease

This leasing structure gives your company lots of flexibility when it comes to your opportunities after the term of the lease ends. Throughout the equipment leasing agreement, your business is basically paying to use the equipment. With an operating lease, you will be given the options to:

  • Buy the leased equipment at fair market value

  • Renegotiate the lease agreement based on the current value of the equipment

  • Return the leased equipment in its entirety
While your business would benefit from lower payments per term, the Fair Market Value Buyout would be a minimum of 10 percent of the original cost of the equipment.

Venture Leases

This equipment leasing structure is a viable option if your business is a promising start-up that requires supplemental equipment and working capital in order to generate profit and you have institutional venture capital already in place. With a venture lease, budding businesses do not have to use their cash-on-hand to invest in inventory or business equipment.

Municipal Leases

  • If your organization is a tax-exempt agency operated by the city or state, you will benefit from discounted equipment leasing rates that are much lower than standard commercial rates.
Tailored lease structuring and payment options are just a couple of the numerous benefits that equipment leasing offers your business. If you're still unsure which leasing program would be most advantageous to your company, just contact a member of the Tiger Leasing team or visit the Tiger Leasing Website for more information.

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posted by Tiger Leasing @ 12:20 PM

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