The Pros and Cons of Leasing Equipment for Your Small Business

As a small business owner, you know that every penny counts. When it comes time to outfit your office or shop with the latest tools and equipment, you may be wondering if leasing is the right financial move for your business. Let's take a look at some of the pros and cons of leasing equipment for your small business.

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Pro: You Can Get the Equipment You Need Without Breaking the Bank

One of the biggest advantages of leasing equipment is that it allows you to get the high-quality tools and machinery you need without having to make a large upfront investment. This can be a real lifesaver for businesses that are just getting started and don't have a lot of extra cash on hand.

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Con: You May End Up Paying More in the Long Run

While leasing equipment can help you save money upfront, it's important to keep in mind that you may end up paying more in the long run. This is because most leases include annual price increases, so your payments will go up over time. In addition, you'll probably have to pay for any repairs or maintenance that's required to keep the equipment in good condition. 

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Pro: You Can Get Up-to-Date Equipment Without Wasting Money on obsolescence 

Another big advantage of leasing equipment is that it allows you to get Up-to-date without wasting money on obsolescence. With new models being released all the time, it can be tough to keep up with the latest and greatest unless you're willing to shell out big bucks for a new piece of equipment every few years. However, with a lease, you can always have the newest model without breaking the bank. 

Con: You May Not Be Able To Get Out of the Lease Early 

One potential downside of leasing equipment is that you may not be able to get out of the lease early if your needs change. Most leases are written for a specific period of time, usually three to five years, so if you need to get rid of the equipment before then, you may be stuck paying for something you no longer need.  

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Pro: You Can Deduct the Lease Payments on Your Taxes 

Another big advantage of leasing equipment is that you can deduct the lease payments on your taxes. This can help offset some of the costs associated with leasing, and it may make it more affordable in the long run. 

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Con: You May Have to Put Up Collateral to Get the Lease 

One potential downside of leasing equipment is that you may have to put up collateral to secure the lease. This means that if you default on your payments, the leasing company can take possession of your assets. 

Bottom Line

Leasing equipment can be a great way for small businesses to get the tools they need without making a large upfront investment. However, it's important to keep in mind that there are some potential downsides to leasing, such as annual price increases and early termination fees. Ultimately, whether or not leasing is right for your business will come down to your specific needs and circumstances.

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If you're interested in learning more about equipment financing options for your small business, be sure to contact National Legacy Capital Group today. We specialize in working capital loans, business lines of credit, and equipment financing, and we would be happy to help you find the best financing solution for your business.

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