Equipment Leasing

Equipment leasing is an option for businesses that need either new or used equipment to make their business venture successful.  A lease allows a business owner the ability to pay for the equipment over a period of time.  A third party funding source (the lesser) will purchase the equipment for you.  As the lessee, you can use the equipment in exchange for regular payments made over a contracted period of time.  As with any other financing from an institution, the lessee must qualify and demonstrate the ability to repay before the lease is written.

Compared to SBA financing or conventional small business loans, equipment leasing tends to cost much less upfront.  Small business bank loans typically require a substantial down payment; two advance payments are generally all that are required at the beginning of an equipment lease agreement.  This allows you to keep your capital in the bank while making important investments in your business.

Leasing may also provide tax benefits not offered by traditional small business bank loans.  Depending on how your lease is structured, you may be able to fully deduct lease payments as a business expense, as opposed to depreciating the value of the equipment as if it were a capital expenditure.  As with any tax related questions, please refer to your tax professional for all advice.