Updated 6th April 2023: Our new infographic explains why you should lease business equipment in visual form!
What business equipment can you lease?
There are many, many types of business equipment that can be leased – in fact, if it’s something you use for your business, you can probably lease it. Here are just a few examples of equipment that is often leased:
- Catering equipment such as fryers, ovens, microwaves, grills and refrigerators
- Industrial equipment such as medical equipment, MOT equipment, and portable buildings
- Office furniture and equipment such as printers and copiers
- Commercial vehicles
What are the benefits of leasing business equipment?
One of the benefits of leasing your business equipment is that you can lease almost anything, and there are many more benefits to consider:
With leasing, you don’t need to pay for the whole costs of the equipment upfront - you can get your equipment within days and start using it straight away. So if your cash reserves are allocated to critical businesses expenses then you can use leasing to acquire the latest technology to help your business grow.
Plan your finances
Rather than having one large up-front payment, when you lease an item you will make regular monthly payments. This means that it’s much easier to plan your finances because you can better predict your outgoings. This can help you to manage your cash flow.
Easy repairs and maintenance
Some lease arrangements include repairs, spare parts and maintenance provided by the equipment provider. This means that maintaining your equipment is less hassle, and it will function better.
Upgrade your equipment
At the end of the agreement, you will have several options. The equipment may be sold, you could continue to lease it, or seek to upgrade to a newer model.
As you can give back the asset at the end of the lease, you won’t be stuck with a depreciating asset or the issue of disposal.
Depending on your circumstances you may be able to reclaim VAT on lease payments, and you can also deduct lease costs from your taxable income. You should seek professional advice from your accountant.
Who should lease business equipment?
Leasing is the ideal way for start-ups to get the equipment they need without much larger upfront investment. But as the above has shown, leasing holds many benefits for all sorts of businesses, both new and established.
When shouldn’t you lease business equipment?
Leasing isn’t necessarily the right option for every circumstance, and you may be in a position where other options make more sense for you. Here are a few examples of when leasing equipment might not be right for you:
Altering your equipment
If you need to make alterations to the equipment you will not be able to do this with an item you have leased.
If you need to lease the equipment for a long period, you may find that this is more expensive than buying the equipment in the long run. However, variants of leasing can be just as effective in financing long-life assets.
Securing future finance
Leased items are not classed as business assets because you don’t own the title of the asset. This means that you can’t use the equipment as security and as it’s not on your balance sheet, it won’t help you to secure future business finance.
If you only need relatively cheap pieces of equipment, you may find it more beneficial to buy what you need outright. But if you need a lot more equipment and would benefit from being able to easily maintain and eventually upgrade it, leasing may be for you.
What leasing options are available with Arkle Finance?
Arkle Finance offers finance leases and operating leases. A finance lease allows you to hire equipment for a period of time, at the end of which the equipment is sold and you can receive a rebate depending on the sale price.
Our operating leases are similar and can be used by education providers as well as businesses. Some of the risk in the asset remains with us, so there are finance charges to you for a proportion of the asset cost.
If you’re not sure whether leasing is right for you, or you don’t know whether you need a finance lease or an operating lease, get in touch. Our friendly team will be happy to advise you. Contact us online using the form on the right, or call 01933 304899.