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Navigating the World of Equipment Leasing: 10 Common Questions Explained

(5 min read)

When it comes to growing your business, equipment leasing offers a flexible and efficient solution. This option has the potential to significantly elevate your productivity by allowing access to state-of-the-art equipment. Here, we delve into the top ten things you should know about equipment leasing.

1. Understanding Equipment Leasing

Equipment leasing is an agreement in which a company like Arbutus Capital buys and owns equipment, then leases it to customers for a set time period. As the lessee, you negotiate the purchase price with the vendor, and then make payments to Arbutus Capital for the use of that equipment. At the end of the term, you have the option to either purchase the equipment or return it.

2. Leasing Used Equipment

Arbutus is one of the few leasing companies that provides leasing options for used equipment. If you're looking for a cost-effective solution, we can assist you in the process.

3. Qualifying and Application Process for Equipment Leasing

First, provide us with a background of your business and details on the equipment you need for your business. You can contact us via our website and we'll get back to you in one business day. We're proud to offer prompt communication regarding your qualification for equipment leasing. Once we've received your credit application, either we or your broker will contact you. We understand the importance of timely responses and strive to keep you informed throughout.

Next, you'll fill out a credit application online or give us a call. Since we own our lease portfolio, credit decisions are made in-house, which allows us to get you a fast approval for your equipment lease. We will review your application and business situation and chat with you on the phone to determine the best route to approval.

4. Impact of Credit on Leasing

While credit is a factor in financing decisions, it's not the only one. Arbutus Capital also takes into account your company history, personal assets, and other factors. If you have credit issues, we help you get there with alternative solutions, and are committed to working with you to find a solution that fits your unique situation.

5. Lease Application Approval Time

With complete information, Arbutus Capital can typically approve financing within four business hours. We understand that time is critical in business decisions, and we make your urgency our priority. Once you meet the credit conditions and receive competitive rates and lease terms, you're ready to get started with acquiring your equipment.

6. Initial Payment Requirements

Typically, the initial payment consists of the first and last lease payments. However, this can be negotiated based on your financial capabilities and business requirements.

7. Converting Equipment to Cash

If you own equipment but are in need of cash, Arbutus Capital can assist you through a sale leaseback. This enables you to convert your equipment into cash, while still having access to the equipment you need to run your business.

8. End-of-Lease Options

The options at the end of the lease are predetermined at the beginning of the agreement. You may choose to make a small end-of-lease payment for continued use of the equipment, opt for larger payments with the intention of ownership, or trade up to newer equipment.

9. Seasonal Payment Flexibility

Arbutus Capital recognizes that some businesses experience seasonal fluctuations in revenue. We're open to discussing your circumstances and offering payment solutions that can provide relief during your off-season.

10. Leasing vs. Buying

Whether to lease or buy equipment largely depends on your cash flow and the needs of your business. In the ever-evolving business landscape, ensuring your operations stay current and competitive can be a formidable task, especially considering the vast financial resources necessary to purchase the latest equipment. At Arbutus Capital, we are committed to helping you make the best decision for your business and are always available to discuss your options. Here are five reasons why equipment leasing can be a viable and beneficial option for businesses:

  1. Preservation of Capital: Equipment leasing allows businesses to preserve their capital by spreading costs over time. This can provide room for other business expenses and investments.
  2. Avoidance of Obsolescence: Leasing equipment ensures companies have access to the latest technology, enabling them to keep up with industry standards and competitors without having to bear the full cost of outright equipment purchase.
  3. Flexibility: Leasing offers flexibility in terms of the length of the lease agreement and the ability to upgrade or return equipment at the end of the lease term.
  4. Tax Advantages: Depending on the structure of the lease agreement, lease payments can sometimes be written off as a business expense, which could potentially have significant tax advantages.
  5. Simplified Budgeting: Fixed monthly payments make budgeting easier, allowing businesses to plan their finances more effectively.

In conclusion, equipment leasing with Arbutus Capital presents a flexible, efficient, and financially sensible choice for businesses seeking to enhance productivity. Arbutus delivers clear communication, timely approvals, and tailored solutions that take into account a company's unique circumstances. Whether you're interested in leasing new or used equipment, converting your assets to cash, or seeking payment flexibility to match your business seasonality, Arbutus is committed to finding the right solution for you. Arbutus Capital is here to guide you through every step of the process — contact us today to get started!

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