Leasing Equipment, Automobiles, and Machinery for Small Business

Leasing equipment for your small business needs may be more expensive in the long run compared with purchasing the equipment. However, the significant advantage to leasing equipment is that equipment leases are generally easier to get for small business, and have more flexible payment options than loans. 

Leasing equipment can be of immeasurable value to a small business without access to immediate operating funds, and it can be used as a strategy in building strong business credit. This branch discusses the question “why lease?” It also explains the 4 qualifiers for leasing equipment – 3 trade references, average bank account balance, corporate filings (standing with the state and IRS) and Dun & Bradstreet score.

Why Lease Equipment for a Small Business?

Leasing equipment is a great way to acquire assets for your small business without an initial outlay of large sums of working capital. A down payment is not usually required on a lease, so you can get the equipment your business needs without hindering your cash flow. If you have no small business credit or bad business credit, leases are easier to get then loans. Lease payments can be deducted as business expenses. You can exchange your leased equipment for state of the art models. You can choose to purchase the equipment or lease new equipment once the lease expires. Holding to your lease payment obligations can help improve your company’s business score.

Qualifiers for Leasing Equipment for a Small Business

Each lessor will have particular standards for accepting your small business for a lease, but there are 4 main factors that are commonly reviewed. The lessor will request at least 3 trade references or companies that you have dealt with through your business, where you had payment obligations. The lessor will review your small business bank account and note your average bank account balance. It is favorable if the amount of your monthly lease payments is reasonable compared with your average account balance. Your corporate filings with the state, including articles of incorporation and financial statements play a role in the outcome of acceptance for a lease. Finally, Dun and Bradstreet’s Paydex score for your business will make a difference in the results of your lease application. Please contact us for more information about leasing equipment for a small business and building a strong business credit score.