When you’re selling equipment, one of the questions your customers might have is whether they would be better off leasing the equipment instead. In several cases, an equipment lease would definitely be the right choice, as leasing equipment can be a tax write-off and can allow for more frequent upgrades. But there are also times when a lease isn’t going to make as much financial sense. It’s important for you to be able to talk to your customers about this, so they know their options and can make an informed decision.
Companies Can Save Money on Their Taxes
Equipment leasing can do more than just save money on a payment each month. It can also save your customers money on their taxes. When they use the equipment for business, the lease payment becomes something they can write off on their taxes. That can reduce their overall tax burden, and help them have more money for other things they need. That can include the lease or purchase of more equipment, hiring additional people, upgrades to the facility, and other expenditures. Depending on how much they can write off (and they should talk to a tax professional about this), leasing their equipment could save them thousands of dollars or more.
Equipment Can Wear Out Over Time
Some equipment gets used on nearly a 24/7 basis. For example, a large factory that creates products around the clock will need expensive equipment that’s going to be used up more quickly than if it wasn’t used as often. If the useful life of something is a set number of hours, it becomes important to be able to get a new one at that time. That’s another way that equipment leasing can be very valuable. A company might not have the money to buy a brand new piece of equipment, but they can certainly keep making a lease payment every month and replace the equipment they currently have.
Up-Front Costs Are Reduced
When a company leases equipment, they reduce their up-front costs. That’s because they aren’t spending a lot of money to buy something that needs a large down payment. Leasing equipment can mean a low to no down payment, and can also mean lower payments every month. That can equal a big savings that can be used by the company in other ways or put into savings for anything that needs to be purchased or leased in the future.
Your customers will need to do the math for their particular type of business and the cost of the equipment they need in order to be sure if leasing will benefit them. But it’s important to show them that leasing can be a good option. Working with the right finance company for equipment leasing can make a significant difference for a company’s bottom line. Look to work with direct lenders like American Capital Group, who make it a priority to understand each company’s unique situation to provide the right type of leasing to help their business grow.
Interested in seeing just how American Capital Group can help customers save money and help you sell more equipment? We’d love to show you how.