Equipment Loan or Lease

Choosing how to finance equipment purchases can often be difficult.  Usually, interested parties are left to choose between two main options: loans and leases.

Traditionally, loans are the most common choice.  Taking out a loan to purchase equipment often works best for well-established companies or when purchasing equipment that is durable and has a long life expectancy.  Established companies with a good credit history are often able to find competitive financing rates, which can translate into increased savings over the life of the loan.  Borrowing to purchase equipment with a long usable life may also be a smart choice if the equipment is likely to remain productive beyond the term of the loan.

Leasing is a less common, but useful, alternative to loans.  Business owners who require equipment that needs to be frequently upgraded may find that leasing is their best option.  Leasing equipment can also be more cost effective than borrowing for those with a limited amount of cash.  In addition, leases tend to be more easily attainable and more flexible in their terms and conditions.  This can be especially useful for businesses that need specialized repayment plans or that have poor credit ratings.

When choosing between loans and leases, it must be remembered that neither option always trumps the other; there are advantages and disadvantages to each.  If you are currently considering an upcoming equipment purchase, we would be happy to help you in your decision.

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