Equipment financing generally takes on one of two forms, either leasing or outright purchases, and there are pros and cons to each approach. If your company is considering acquiring equipment and machinery that will help you achieve your business goals, you’ll need to consider which of these two possibilities for equipment financing is most beneficial to your organization.
Equipment Purchases
The benefit of purchasing your equipment outright is that once you’ve paid off the loan from your equipment financing, you will own that equipment free and clear. As the owner, you can do any kind of adjustments or enhancements to that equipment which you choose. However, this may be a drawback in some industries, especially if that equipment becomes dated very quickly, and is superseded by newer, more capable kinds of equipment. Since you have purchased the machinery, you’re kind of stuck with it in this case, and it may be difficult for you to get any kind of return for outdated equipment.
Equipment Leases
In this form of equipment financing, you never take ownership of the equipment, since ownership always rests in the hands of the lender. This can be a good thing since it frees you up from having to do normal maintenance on the machinery. It also means that you’re free to walk away from the equipment at the end of the leasing period. If yours is a business where equipment is constantly being improved upon and newer equipment is always more desirable, leasing can be ideal, because you have no commitment beyond the duration of the lease. When the lease has expired, you can choose to extend the lease, to start a new lease on newer equipment, or to walk away from the lease and the equipment entirely.
Is your business in need of equipment financing?
Many companies only need to obtain the proper equipment in order to get to that next level of success. If your business is in this category, contact us at Elevation Financial so we can discuss some options for equipment financing that will help you to achieve your objectives.
