Any type of company whether just about to start in a business or trying to boost the venture in order to give it more drive, should seriously consider a direct finance lease. You should be able to provide all the material and equipment your newly acquired clients requires, therefore you must stock up on a wide ranging inventory in order to meet their needs.
Financing leases are the most affordable choices when having to spend considerable amounts of money, providing a no risk option as opposed to other capital leases or expensive loan plans. So, why is finance leasing a better option?
This type of leasing plan differs from the other above mentioned, as in you can purchase equipment through a leasing agent. This means that your company does not purchase the equipment directly, but it is leased from a third party who actually owns the equipment.
The great advantage is that, not only are you keeping your capital in the business, you are also profiting from equipment and reaping the profit without having to actually buy it directly. You will benefit from the income stream by leasing the equipment to your clients instead.
Another advantage is that the equipment you hold on lease will not be a load on your investment should you not find sufficient clientele prepared to lease it from you. Which company can afford to purchase equipment that simply lies about in storage for lack of clients able to lease it from you?
Now that the advantages are clear, let us take a closer look on some special aspects to consider when choosing this type of finance plan. In order to be able to conclude the agreement with a leasing agent, a company has to provide some type of assurance. Additional documents and personal collateral may be required from you to insure the payments can be met and on time.
As far as your company?s customers are concerned, these are not responsible to the leasing agent, only to you for the payment of any equipment they are going to use. Your company will have to generate enough income through the leasing of equipment to adequately pay back the finance lease and generate profit from the venture.
As far as maintenance of equipment is concerned, you can make a deal with the leasing agent and negotiate this clause, requiring them to carry out maintenance so that you are clear of added charges and expenses.
In conclusion, the obvious benefits of this leasing agreement, is that it is a no risk choice. No huge financing in order to purchase stock, no stagnant equipment lying in store without being leased by your customers, resulting in the best way to launch a new business without large cash expenditure up front. You may also benefit from tax deduction, allowing you to have deductions on your income calculated on the value of the equipment.
If you choose a finance leasing agreement and you carry it out properly, this plan is a winning choice with a minimum risk and effort involved, no doubt one of the best choices when launching a new business.
Source: http://daydaily.com/2013/05/02/finance-lease-a-no-risk-choice-when-launching-a-new-business/
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