When And How to Lease Equipment


These days, just about anything can be leased — from computers and heavy machinery to complete offices. The kind of business you’re in and the type of equipment you’re considering are major factors in determining whether to lease or buy.

If you’re starting a one-person business and need just one computer, for instance, it probably makes more sense to buy if you have the cash. On the other hand, if you’re opening an office that will have several employees, and you require a dozen computers, you may want to look into leasing.

According to the Equipment Leasing and Finance Association (ELFA), approximately 80 percent of companies lease some or all of their equipment, and there are thousands of equipment leasing firms catering to that demand. “[Leasing is] an excellent hedge against obsolescence,” explains a spokesperson at the ELFA, “especially if you’re leasing something like computer equipment and want to update it constantly.”


Other leasing advantages include:

1) Gaining immediate access to the most up-to-date equipment and tools for your business.

2) Getting a fixed financing rate instead of a floating one.

3) Benefiting from tax advantages.

4) Conserving working capital.

5) Avoiding cash-devouring down payments.



As you are putting together an equipment leasing package, consider these issues:

1) What equipment do you need and for how long?

2) Do you want to bundle service, supplies, training and the equipment lease itself into one contract?

3) Have you anticipated your company’s future needs so you can acquire adequate equipment?

4) What is the total payment cost?


Also ask the following questions about each leasing source you investigate:

1) Who will you be dealing with?

2) Is there a separate company financing the lease?

3) How long has the leasing company been in business? (As a general rule, deal only with financing sources that have been operating at least as many years as the term of your proposed lease.)

4) Do you understand the terms and conditions during and at the end of the lease?

5) What are the options regarding upgrading and trading in equipment before the lease period expired? Every lease decision is unique, so it’s important to study the lease agreement carefully.

Apply For Your Lease Today!


— Larry Gray, Connect Lease Equipment Financing

Larry Gray 56KLarry has been in the leasing business since 2005 owns and operates several private companies in the financial Industry. He has a lease brokerage, finance & leasing company and owns a manufacturers sales and marketing firm. Larry advises companies ranging from small, owner-operated businesses to large private corporations, every step of the way. Whether the business is incorporating, forming a partnership, reorganizing or restructuring, Larry uses his experience to give each client sound, practical financial advice. His clients often ask him to help source equipment and represent clients buying or selling a business.

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