10 Reasons To Lease Your Material Handling Equipment
Over 30% of all capital equipment in the U.S. is acquired through leasing, and about 80% of all businesses lease at least some of their equipment. Lease programs offer many advantages over outright purchases, and if you’re in the market for material handling equipment you should consider the following:
Lower Initial Cash Outlay: You can still get expensive equipment but preserve your cash on hand if you need it for other purpose.
Increased Productivity: Replacing your machines every few years means that you consistently have newer equipment and less downtime. Having equipment sidelined can be costly, not only because of production decreases, but also because equipment outages often result in underutilized or idle employees.
Pay As You Go: Spreading the cost of utilizing an asset over a few years gives you the benefit of having your costs more closely align with your actual use. It also lets you hang on to your cash for a longer period of time, meaning you can use it for opportunities with larger returns.
No Long Term Commitment: Leasing allows you to put equipment through its paces and make sure that it performs to the standards that you expect. If you’re unhappy with it, you can simply return it at the end of the lease term instead of being stuck with it for its useful lifetime.
Consistent Technology Updates: When you lease, you replace your equipment every few years, meaning that you can take advantage of new features and better technology. In other words, you’ll never get stuck with outdated equipment again.
Tax Treatment: Operational expenses are fully deductible, as opposed to capital equipment that is depreciated. From a tax perspective, leases are often a very good business strategy.
Consistent Maintenance Costs: Maintenance packages are often built into a lease agreement, meaning that you have a single, predictable monthly cost that covers everything so you don’t have any surprises.
Short Term Business Requirements: When you lease, you can account for short term situations in your business. For instance, if you are building a new distribution center but it will take 3 years to complete, you can lease equipment for the interim and purchase equipment for your new DC when it’s completed.
Market Flexibility: If you’re expecting a market downturn or recession, you can add the equipment that you need now without being locked in for the life of that equipment.
Buying Power: with a lease, you can often acquire higher end equipment thank you normally would through a straight purchase.
If you’re interested in an equipment lease, contact a finance specialist at Raymond Handling Solutions by calling 562-944-8067.