Everything your business needs to know about leasing
Leasing - renting equipment for a set period of time for a fixed monthly fee - can be a real advantage for a business. Leasing equipment instead of buying outright is an attractive option for several reasons for many companies; here mumandworking take a look at some of those reasons.
When your business next needs new equipment, whether that be technology or company vehicles, it's well worth considering leasing instead of buying. For one, leasing negates the need to pay up front for items, thus avoiding the strain of funding large one-off purchases - but there are other benefits as well as staying in control of cash flow, too.
You are usually guaranteed the latest model of whatever it is you’re leasing; so, for example, you might take out a three-year lease on a set of computers. We all know how quickly technology becomes obsolete or falls behind the curve, so at the end of your lease you simply upgrade to the latest model, and perhaps even at the same price. This means you're staying on top of the latest technology, and also keeping up with - or getting ahead of - competitors. Alternatively, some leases will allow you to purchase the item at the end of the term, for a price commensurate with depreciation. Leasing can be tax efficient, presenting an attractive option from a financial standpoint.
One of the biggest issues for a business is finding suitable premises, and then sourcing the funding to pay for them. Unless your business has plenty of capital, the option of leasing the premises - at least initially - is probably the most suitable.
As one would expect, many careful checks need to be taken before signing a lease agreement with a landlord, which should correspond with the 2007 Code for Leasing Business Premises. Leasing Business Premises suggests several tips for you to bear in mind, such as asking the landlord to keep any deposits in a high interest account, and checking exactly who pays what at the start of the term; for example, VAT, rates, and insurance.
Similarly, you might need a new vehicle or vehicles for your business, and leasing out a car can provide you with a new, reliable and efficient car, van, lorry or other option at the fraction of a cost of buying one or taking out a loan at the dealership. You may also find that issues such as servicing and maintenance are catered for by the leasing company. It’s worth putting in a few hours of research to find more information about how it works.
There is a huge amount to consider when running a business and leasing is just one of the alternatives – albeit one that can save a lot of cash and cut out a lot of hassle.
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