Equipment Leasing

Conserve cash by leasing instead of buying.

Definition Or Explanation: Equipment leasing is basically a loan in which the lender buys and owns equipment and then rents it to a business at a flat monthly rate for a specified number of months. At the end of the lease, the business may purchase the equipment for its fair market value (or a fixed or predetermined amount), continue leasing, lease new equipment or return it.

Appropriate For: Any business at any stage of development. For start-up businesses with no revenues, small ticket leases, those of $150,000 or less, are feasible on the personal credit of the founders or owners if they are willing to make the monthly payments.

Supply: Abundant. Of the billions of dollars individual and institutional investors pour into the capital markets each month, a good hunk finds its way to leasing companies that use these funds to purchase equipment on behalf of small businesses. With more and more money flowing into the markets, leasing companies are flush with capital, eager to do business and responsive to competition with lower monthly rates.

Best Use: Financing equipment purchases. Leasing can also finance the soft costs often associated with equipment purchases, such as installation and training services.

Cost: Lease financing is generally more expensive than bank financing, but in most instances, it is more easily obtained.

Ease Of Acquisition: Easy for leases of less than $150,000. An application for a small-ticket lease is generally no more complex than a credit card application. Leases for more than $150,000 require detailed financial information from the business, and the leasing company conducts the same credit analysis a conventional bank would.

Range Of Funds Available: Unlimited

From Where's the Money? Sure-Fire Financing Solutions for Your Small Business, by Art Beroff and Dwayne Moyers. (c) Entrepreneur Press, 1999.

Related Topics

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game
Thought Leaders

The Collapse of Credit Suisse: A Cautionary Tale of Resistance to Hybrid Work

This cautionary tale serves as a reminder for business leaders to adapt to the changing world of work and prioritize their workforce's needs and preferences.

Leadership

6 Myths About Leadership That May Be Holding You Back

By dispelling these leadership myths, we can create a more realistic and nuanced understanding of what it means to be an effective leader.

Fundraising

3 Ways for Women Tech Founders to Secure Funding

New research identifies strategies to help women access the startup capital they need to grow.

Branding

7 Ways Dating Apps Are Lying To You

When people are reduced to a profile picture and bio, it's easy to forget that they are real human beings with complex emotions and experiences.

Leadership

I Advise the Real-Life 'Logan Roys' of the World. Here's Where the 'Succession' CEO Went Wrong.

Based on my experience working with and counseling the real-life Logan Roys of the world, here are five lessons the Roy family could benefit from learning.