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Don’t Buy It, Lease It

Oct 26, 2016 10:18:16 AM No Comments

Looking to acquire much needed equipment for your company? Whether you need office furniture, medical equipment, a new security system, or vehicles, you want to make cost effective buying decisions. Leasing equipment instead of buying the equipment outright can be a smart, cost-conscious decision that benefits your business tremendously. Below are five benefits of leasing equipment:

  • Cash is KING. The majority of small businesses are cash sensitive. Leasing allows these companies to preserve their cash as they avoid having to pay a large cash expense (balancing cash outflow). Instead of waiting until next year when your budget isn’t as tight, obtain the equipment now, through leasing, so you can use it to generate profits.
  • Tax Advantages. Section 179 of the IRS Tax Code allows businesses to subtract the full purchase price of leased/financed equipment for the current tax year. Below is a possible example*

Equipment Cost

$10,000

Section 179 Expense Deduction

$10,000

Effective Tax Bracket:

35%

Tax Savings From Use of Section 179:

$3,500

Net Cost After Section 179 Savings:

$6,500

 

  • Don’t become obsolete. Leasing allows you to keep pace with technology. If the equipment you purchased at the end of the lease isn’t cutting it or is out-of-date, you are able to lease new equipment that allows your company to remain competitive and service your customers in the best way possible.
  • 100% Financing. For the most part, leasing doesn’t entail a down payment and you can finance up to 100% of the total equipment cost. Avoiding a large down payment allows a business to spend more money on revenue-generating activities.  
  • Convenience. Leases provide flexible terms and the approval/documentation process is usually very quick. The structure of a lease can be customized to best fit your unique budget and needs.

Think leasing might be a good option for your business? Give me a call at (866) 604-8160 ext. 5022 to discuss.

 Univest Capital is a subsidiary of Univest Bank and Trust Co.

*Please note that neither this financial institution nor any of its affiliates give tax or legal advice. Consult a tax advisor regarding what may be best for your personal situation. 

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