Leasing Advantages For Machine Shops
Leasing your machine tool equipment through Tech Financial Services, A Five Lakes Company, offers numerous advantages over other financing options. Below are a few of the benefits you can enjoy from leasing your next piece of equipment through TFS.
Companies have different needs, different cash flow patterns, unique and sometimes irregular streams of income. Therefore, your business conditions – cash flow, specific equipment needs, tax situation – dictate the terms and conditions of the lease. Regardless of the current interest rate environment, we have a solution to help you acquire equipment.
Technology Upgrades Prevent Equipment Obsolescence
If your industry demands that you have the latest technology, a short term operating lease can help you get the equipment you need fast and allow you to keep your cash. Your equipment needs can change over time due to diversification or other company changes. Your risk of getting caught with obsolete equipment is lower, because you can return the equipment or secure an upgrade at the end of the lease term.
Cash Flow Management- 100% Financing
Borrowing reduces your lines of credit. Leasing keeps them open, so you don’t tie up your cash in equity. Leasing requires very little money down, so you avoid costly down payments. Leasing allows you to include installation, freight, maintenance, software, etc. in the lease payment, so you have more money to invest in revenue generating activities. Leasing offers greater flexibility and maintains your liquidity necessary for future business decisions. Your new equipment is making profits immediately without touching your cash reserves.
Overcomes Tight Budget Limitations
Because lease payments can be expensed, you do not have to go through the oftentimes tedious process of approving a capital equipment purchase. A lease helps justify a purchase to management who may have delayed a decision until next year because of budget restrictions. With other advantages such as off-balance-sheet financing, leasing helps you better manage your assets and liabilities.
Retains Capital Strength
When you lease, you are able to afford the equipment you need and spread the payments out affordably over time. This allows you to retain your capital for other day-to-day expenses. Because a lease is not considered a long term debt or liability, it will not appear on your financial statement as a debt, which makes you more attractive to lenders if you need them. Since leased assets do not appear on your balance sheet, it can improve your financial ratios.
Reduces Cost of Inflation
Leasing allows you to buy Machine Tool Equipment now before inflation drives up the cost. You can enjoy using the equipment now and paying for it with tomorrow’s inflated dollar.
The leaser realizes the depreciation benefits, enabling you to deduct 100% of rental payments as regular operating expenses. Also, if you are subject to the alternative minimum tax, you benefit because lease payments are not considered tax preference items. Consult your tax advisor about your specific situation.
Convenience in Equipment Management/Asset Management
By leasing, you transfer the uncertainties of asset management, which allows you to concentrate on making that asset a productive part of your business. The whole idea behind equipment acquisition is business growth. TFS can help you expand and meet your ongoing business objectives.
Leasing allows you to quickly respond to new opportunities with less red tape and documentation. Leases can be approved very quickly allowing you to have your equipment in pace much faster.
New or used
Virtually any equipment can be leased. Some tax breaks are only available for new equipment, but there are many other beneficial options to pursue for your equipment needs.
We have many payment options to choose from, most include first and last months payment up front, which is much less than a down payment on a purchase. There are also many options for your equipment at the end of the lease terms. Options include;
Renewing the lease, returning the equipment, securing an upgrade, or purchasing the equipment.
The rates we offer change with the market, but they are always competitive.