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A broad spectrum of customers either finance or lease equipment for business or personal use. And the list of the variety of equipment available is seemingly endless. The determining factors of whether to lease or finance equipment include a) who is the customer b) what the equipment is needed for and c) how long or how often it will be used.
Types of Equipment
Equipment that is available to rent or purchase can run from small appliances like coffee makers or hand tools-to monster sized machinery capable of excavating huge sections of the earth. Often, the equipment needed can be utilized in either residential or commercial use. For instance, there are a small percentage of expert do-it-yourself homeowners who handle mammoth machinery with the same ease as using an electric toothbrush.
The majority of DIY homeowners tend to lease equipment needed for a specific task. Companies tend to buy equipment that is used in the course of doing business but they also opt to lease as they deem necessary for several reasons.
A few types of equipment used in residential and industrial applications:
Construction machines, such as:
Landscaping equipment, including:
Exercise equipment, like:
Office machines, among which are:
Hospitality and convenience items include:
In general, businesses that either need equipment, already have equipment but need working capital, or companies just starting up are best suited to finance. Some machinery can serve its purpose well even if purchased used, which can save money. For those that choose to lease equipment, a contract known as a closed end lease with no balloon payment at the end is a good choice.
There are disadvantages that business owners or individuals should be aware of when they consider whether to buy or rent equipment.
A few pros of financing equipment:
Compared to pros of leasing equipment:
Cons of financing equipment:
Vs cons of leasing equipment:
There are programs for financing equipment regardless of credit score or how long the company has existed. With the exception of an open bankruptcy or collection of child support, business owners will most likely be successful in getting equipment financing.
There are 4 main types of business equipment financing:
There are several business equipment leasing options available. They fall under two categories-capital leases and operating leases. Basically, a capital lease offers the same advantages and disadvantages of ownership of the equipment. The equipment’s assets and liabilities are on the balance sheet. The operating lease means that the equipment is not on the balance sheet. The leasing company technically owns it and all of the tax advantages to which it may be entitled.
There are 5 main types of equipment leases which fall under these two categories:
Millions of individuals and businesses compare all of the options and make the choice of financing equipment vs leasing equipment best suited to their situation, making for some interesting tidbits of information on the subject such as:
There are far too many selections in financing or leasing equipment to list and describe them all here. Choices are made based on the customer, their needs, and how often or long the machinery is needed. But as long as there are things to be built and businesses to run, there will be a need to finance or lease equipment.
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