Equipment Financing is comprised of both loans and leases for the equipment you desire.  While both options are very similar there are a few key differences and Business Loan Partners is prepared to discuss your needs and find out which option is best for you.  Then we will find the lender or lessor for you who will get you the funds you need.

Equipment Loans

When you get a loan for your equipment you are buying the equipment and will own it.  The lender will have their lien against the loan until the loan is paid in full but the business gets the full tax advantages of the purchase.  This works well for the buy and hold equipment buyer; if you can keep the equipment for an extended period of time you will often come out ahead owning your own equipment.  Also in comparison to other loans Equipment loans may require less paperwork and documentation because the equipment serves as collateral securing the note.  But in comparison to Equipment leases the documentation requirements is greater with a loan than a lease.

Equipment Leases 

A lease allows you to rent a piece of equipment, additionally you can often avoid down payments and it is possible to have lower monthly payment with a lease than a loan.  Leasing equipment can be particularly attractive to businesses whose equipment is high tech and they need cutting edge technology and are constantly replacing their equipment.  Since you’re not obligated to make a purchase at the end of your lease, you have the option to return an obsolete piece of equipment at the end of your contract.

Because leases can have lower payments than loans a lease provides your business greater cash flow flexibility.  Cash flow is critical to businesses so having greater flexibility is also peace of mind for the business owner.  Finally don’t assume your tax incentive will go away, speak to your accountant but often you can get comparable tax treatment whether you lease or buy as long as the lease is structured appropriately.