When you are a small business owner that relies heavily on computer technology to perform core business tasks, it is essential that the equipment you use is always up-to-date and outfitted with the best peripherals. However, even if you are enjoying a great deal of success, you may have trouble coming up with the funds to purchase replacements for defective or dated equipment. You should seriously consider leasing as an alternative to an outright purchase of new equipment if you find that your cash flow is limited.
If you are new to the concept of equipment leasing, the following primer explains why it may be the best method to securing new equipment for your growing business.
Fast Approval and Access to Equipment
When a computer server goes down or starts to malfunction, you cannot waste any time replacing the device, especially if it holds crucial data like customer profiles. However, if you do not have a long-term relationship and stellar credit with a computer hardware firm, you may have to wait days to receive approval for financing a new purchase. You may also get turned down for credit.
However, companies that offer financing for equipment leasing provide a way for you to leapfrog the extensive credit checks needed to get financing directly from a retailer. Many equipment leasing firms enable you to submit an application online and get same-day approval for the funds needed for your purchase.
You can choose the type of lease that fits your needs and the lease term. You may be able to obtain leases with more favorable terms than loans from banks or credit from a seller.
Leases are also available for used equipment. The leasing firm will pay the equipment supplier upfront, so you can receive your purchases right away instead of spending time shopping around for sellers that will offer you credit.
Less Upfront Expenses
For many successful small businesses, cash flow may be limited due to the wait times between sending out invoices and receiving payments for customers. In the meantime, as you wait for payments to roll in, you have to scramble for money to pay for equipment upgrades.
If the initial cost of obtaining new equipment is too high, you could be in trouble and stuck with devices that perform erratically, which can affect your bottom line and your ability to perform core business tasks.
However, with leasing, you will not have to deal with the steep upfront expense of buying assets outright. You can acquire the equipment you need with little to no upfront costs. You will not have to worry about steep down payments.
In addition, leasing is also more ideal if you do not want to tie up your lines of credit with your bank or worry about traditional lender restrictions for future loans if you borrow money for equipment upgrades. The cash that you planned to use for new equipment can be reallocated for other expenses to help your business expand or pay off bills.
Easier Path to Upgrades
Over time, hiring technicians to keep obsolete equipment running puts a dent in your operating expenses. However, you may feel as if you are in between a rock and a hard place if you cannot afford to replace old workstations, routers, servers and other devices.
With leasing, you can get rid of the outdated equipment and keep your business on par with nimble competitors by obtaining the upgrades you need without delay. Furthermore, if you hire new employees, you will need to have up-to-date equipment ready for them on their first day of work. You do not want to waste time training them on obsolete hardware.
Overall, leasing will help you avoid a slow-down in your growth if you are unable to get a bank loan or cannot afford the full cost of brand new equipment. Plus, you will not have to contend with the hassle of haggling with loan officers and equipment suppliers for favorable financing terms.
For more information, contact a professional leasing company like Westar Financial Inc.