Eight ways businesses benefit from equipment leasing
(4 min read)
There are many benefits to leasing vs. buying equipment. Of course, every business owner will have their own circumstances, goals and challenges to consider when deciding the best way to acquire new equipment. For most, leasing equipment offers business owners flexibility, lower risk and expense-side predictability. Because of this, equipment leasing is a popular way to finance small business growth. After working with hundreds of business owners over the past 40 years we understand the strategic value of equipment leasing.
Here are 8 benefits of equipment leasing:
- Up to 100% financing
- Flexible payment schedules
- Conserve and manage your cash
- Tax benefits
- Improve your balance sheet; less debt provides more finance options
- Leaseback assets you already own
- Improve competitive advantage with the latest technology, efficiencies or capacity
- Be free from obsolete equipment at the end of the term
"I like the flexibility, security and control leasing provides. It reduces risk and allows for better management of cash flow and expenses, critical in any company, but so much more in a small business.”
- Arbutus Capital Client: Cheryl (Cherry) Schellenberg Cherrie’s Breakfast Bistro
Benefits for business owners; leasing explained:
1. Up to 100% financing.
In most instances, we allow lessees to make the first rental payment only in advance, which is uncommon in our industry.
2. Flexible payment schedules
Because we own our portfolio we can write our own rules. We can often provide financing with little down as the first payment. We typically write the end of term Purchase Options as either $10 or 10% of the original purchase price. Our lease terms usually range from 24 to 60 months. But all this can be changed if the customer needs it to and if the deal - as a whole - warrants further flexibility.
3. Conserve and manage your cash.
Use our money to make you money by adding or upgrading equipment. Use your money to invest in other areas of your business like marketing or adding staff. Or save your cash for unforeseen expenses or business downturns.
4. Tax benefits
Our leases are written as rental agreements with an option to purchase the equipment at the end of the lease term. In many instances, 100% of the monthly rental can be written off. We encourage our lessees to consult with their accountants on the write-off benefits of rental payments over cash purchases.
5. Improve your balance sheet; less debt provides more finance options.
Healthier financials help keep the windows of opportunity open for you.
6. Leaseback assets you already own
One way of generating quick working capital is to sell an asset you already own to Arbutus. A lease contract is created at a mutually acceptable term. Minimum cash down is required and sale-leasebacks can be a great solution to short or long-term cash crunch while enjoying the full benefits of leasing write-offs for your financials.
7. Improve competitive advantage with the latest technology, efficiencies or capacity
Become or remain an industry leader by leasing the most up-to-date equipment without crippling your cash flow or working capital.
8. Be free from obsolete equipment at the end of the term
Most business owners take advantage of the end of the term Purchase Option on their lease as it rarely makes sense to return the equipment. They'll find it will either disrupt their workflow or because the equipment is worth more than the Purchase Option amount. If they need to upgrade they often buy out their equipment using the Purchase Option, then trade their existing equipment in at a dealer to newer or different equipment. However, Lessees are allowed to return the equipment to Arbutus if they so wish.
Check out our News page for a few client success stories.
Click here to learn more about the industries we serve and how we work with business owners to get the equipment finance deal they need.