What are the competitive benefits that a company gets from leasing new equipment?
To help you see the competitive benefits of leasing new equipment for your company, we asked business leaders and CEOs this question for their best insights. From leasing being cheaper than financing to zero equipment disposal costs, there are several benefits that companies may get from leasing new equipment that outweighs financing or outright ownership.
Here are five competitive benefits of leasing new equipment:
- It’s Cheaper Than Financing
- The Leasing Company Fixes It When It Breaks Down
- You Have Cutting-Edge Technology and Immediate Repairs or Replacement
- Leasing Frees Capital for Larger Fixed Costs
- Zero Equipment Disposal Costs
It’s Cheaper Than Financing
Any hardware that you buy for a company – whether it’s a copier or a vehicle – is going to cost less per month on a lease compared to financing to own. Such a large purchase is likely to be financed as opposed to a straightforward purchase. That usually leads to monthly payments that include high rates of interest. Additionally, leasing options include automatic upgrades every few years. Outright purchases of equipment are kept longer and more maintenance is going to be required down the line, which leads to more financial strain. Leasing is the way to go to keep costs down and hardware updated.
Alan Ahdoot, Adamson Ahdoot Law
The Leasing Company Fixes It When It Breaks Down
If it breaks down, someone else will be there to fix it. I love leasing because when something happens to our new equipment, I call the company, and within hours someone is there fixing it. If I own the equipment and it breaks, that’s just one more thing to sink my money into, one more thing to add to my plate, and more time sucks. But with leasing, I’m already ahead of the game because if anything happens to that important equipment, I’m not going to lose time and money and my business isn’t going to suffer… I’m just going to call them.
Staci Brinkman, Sips by
You Have Cutting-Edge Technology and Immediate Repairs or Replacement
Always get new and improved. When you lease new equipment you get the competitive benefit of having cutting-edge technology and access to immediate repairs or replacement if anything happens. With so much business happening online, having access to new equipment that is not being used by your competitors can give your company the edge and momentum it needs to be a leader.
Karim Hachem, Sunshine79
Leasing Frees Capital for Larger Fixed Costs
Leasing new equipment frees up capital for larger fixed costs. Companies cannot operate without the vital equipment they need to service their customers. Equipment is often a high cost on many balance sheets. With other expenses like renting space, restocking inventory and making payroll, there may not be spare capital left to go around.
Fortunately, expensive equipment is often an item that can be leased. This allows a company to have the operating capacity they need without the large capital expense which comes with acquiring equipment. Freeing up capital gives companies the opportunity to allocate resources towards efforts that will give them an edge over their competitors.
Katy Carrigan, Goody
Zero Equipment Disposal Costs
When a company goes with the buying option for its equipment compared to leasing, it has to deal with its aftermath in terms of disposing of the assets whenever it gets new ones. This process may seem straight when read on paper, but equipment disposal is challenging if a business wants to get some return from it. Hence, going down the leasing route ensures that your company can use its equipment until the expiry of the lease without having to think of how to handle it later. This responsibility shifts to the lessor.
Gisera Matanda, WeLoans