Through equipment leasing, businesses are able to obtain the equipment that they need without having to make a major down payment and pay low monthly payments over time. In addition, businesses that lease their equipment will have the opportunity to upgrade their existing equipment to their wants and needs.
A loan is a chance for your company to invest in something, rather than just borrowing it. If your company has a firm cash flow and the strong financial stability to pay more up-front, then a loan might make the most sense. That being said, when you purchase equipment through a loan, that equipment is yours, even when it is outdated or obsolete. If the equipment that a company is financing through a loan becomes obsolete, they’re not going to be able to upgrade to newer, better technology. Instead, your company might have to deal with the existing equipment or replace it with another purchase. In addition, loans typically have a hefty up-front cost that many companies aren’t willing to give up.
As you can see, the type of equipment financing that you choose ultimately depends on the needs and current state of your business. It’s important to note that all business owners should evaluate their unique wants and needs before making a major financing decision. Hopefully now you have a better understanding of the two financing options and can make a more educated decision for your company’s future. Contact Tiger Leasing today for more information on how an equipment lease can benefit your company!