Equipment leasing is a common practice among a large proportion of businesses; in fact, eight out of ten US companies opt to lease equipment, according to the Equipment Leasing Association. By doing so, businesses are able to induct new machines/ equipment into their “work force” without actually purchasing expensive machinery.

A lease can be defined as a loan given by the lender who purchases and owns any business equipment and then rents it to a business for a specified monthly or annual amount for a specified period. After the completion of this term, the business can consider purchase of the said machinery at the market value after depreciation, continue with a similar lease contract or lease new equipment and return the machinery.

The key advantages for business on account of equipment leasing are:

• Small start up ventures may not have requisite funds to invest in large scale machinery; ability to pay rent for leased equipment can set the business running.
• Leasing companies are flush with funds and provide requisite machinery at low monthly rentals
• Leasing may also finance other associated costs such as: installing the machinery, training staff etc.
• It is easy to access lease financing as compared to bank financing

• Less expensive machinery is leased with ease and requires limited formalities
• High end expensive business equipment require a thorough check of the business proposal, board of directors and other financial information before a lease facility is made available to the business.

This buyer guide takes you through the various aspects that must be assessed when leasing business equipment. Let this guide help you understand the types of equipment lease financing, tips to evaluate lease companies and help you make an informed decision.