FAQ Equipment Leasing

What is a lease?

A lease is an agreement with a contract between a leasing company and a customer in which the customer will use the company’s equipment. The contract will give the terms as to how long they can use the equipment, and how much they will be paying each month. Depending on the terms of the lease, the customer will be able to buy, return or continue to lease the equipment.

How is leasing equipment better than buying it?

One advantage of leasing is that it requires little or no money down. With purchasing equipment it can tie up significant amounts of cash and credit. Another advantage of leasing is that a business may purchase new equipment and own it, only to find that in a short matter of time their equipment is outdated and needs to be replaced. With leasing, after the term is over the customer may be able to upgrade their equipment.

Are there any tax benefits associated with leasing?

Lease payments are usually fully tax-deductible since they are considered an operational expense, unlike a loan payment. In fact, up to 100% of the equipment cost can be completely deducted from your taxable income. Certain specified limits are set, so be sure to check with your accountant to ensure you can take the full amount.

Where do I find a leasing company?

Before you set to find a leasing company, determine what your needs are for your business. Calculate the costs that you can spend per month. With so many available leasing companies to choose from, be sure to find one who can give you reasonable prices as well, as be able to work with you to find a plan that is suitable for your needs.