Which is Best? Equipment Financing Or Leasing?

It is exciting to start a new business, exhilarated at the hope of future success. Many times, new business owners are surprised at the amount of money they need to begin. It’s common for big dreams to become overwhelmed by small finances.

Depending on the industry of your new business, you may need heavy duty vehicles, numerous computers, industrials tools, or landscaping equipment. Your decision as to whether you should lease or purchase these items is usually based on your unique situation. This article explores the choices of equipment financing or leasing, looking at making this decision based on your short term and long term needs and budget along with any tax considerations.

Length Of Use

You may only have a short term or limited use for some of your business assets, depending on certain projects. After a project is finished, these asserts may no longer be needed. Alternatively, you may need some tools for the long term because they can be applied to numerous projects. This is an important factor in your choice to purchase or lease.

Leasing may be appropriate when the gear you require will only be needed for a short time. Instead of being stuck with expensive assets you don’t plan to use, a lease offers you an economical way to only use gear for a short time before returning it. When you’ll use gear long term, equipment financing is usually more appropriate because you will own it.

Advances In Technology

Many industries require businesses to upgrade their technology to remain competitive. For example, laboratories use tools and technologies that can be quickly outdated, causing the need for frequent replacements and higher expenses.

Alternatively, other businesses are less affected by advances in technology. For example, a restaurant can use the same equipment for years before needing replacement, as the technology doesn’t really change. Restaurant equipment financing is usually better than leasing for refrigerators, grills, and other restaurant equipment.

Considering Cash Flow

Cash flow is an ongoing challenge for many small businesses. If you have cash flow constraints in your business, leasing may provide you with more breathing room as you can get the assets you need to run your business without having to jeopardize your cash flow.

Taxes

Equipment financing and leasing contracts have different implications when it comes to taxes. Usually, monthly lease payments will qualify as a deductible business expense which factors into the cost of the lease. Tax law treats most purchased assets on a scale of graduated deductions called depreciation. To determine whether equipment financing or leasing is best for your business when it comes to taxes, it is wise to consult a tax advisor.

If you need expensive equipment for your business, securing a loan from your local bank isn’t always the most advantageous solution. Consider your alternatives by speaking with companies that specialize in helping businesses obtain the equipment they need through equipment financing or leasing. By finding a company with flexible terms, you can preserve your cash flow and gain immediate access to the vital equipment your business needs to compete and profit.

Could IT Financing Be the Solution for Your Business Startup?

If you wish to make it into the “major leagues”, then having your own IT equipment in place is a must. Not only will this make communication easier between your employees, but it will also help to make sure your customers are happy by allowing you to fulfill new orders with relative ease. If you’ve decided that it’s time for your business to take advantage of new technological advancements, then one of the most important questions you will need to ask yourself is how you plan on paying for it. This is where IT financing comes into play. IT financing is a very lucrative option that could free up cash to be used in other aspects of your business.

IT Financing: The often overlooked option

No matter what type of IT hardware/software you need for your business, it will usually be quite expensive. So expensive in fact that it often becomes the number 1 barrier for new entrepreneurs looking to start a business. A lot of these entrepreneurs do not realize is that the capital for the technology needed can be financed. Yes, there are plenty of IT financing companies around that can easily accommodate whatever type of hardware/software you need to buy.

IT financing instead of buying is very advantageous because it will allow you to use your limited startup capital in other ways that may bring more benefits to your company. This could mean putting a bigger deposit down on the lease for your building, or perhaps even buying necessary supplies so that you can get started immediately.

A few things to watch out for when looking for a lender

Believe it or not, not all IT financing companies are created equal; when looking for a company to finance your IT infrastructure, there are a few tale-tale signs to stay away from. These include:

- High APR lenders.
- Lenders that require a substantial amount of upfront collateral. There are plenty of companies that do not require any at all.
- Contract managers that know little about how the IT industry works.
- Fixed non-negotiable contracts.

While there are of course other negative signs to stay away from, these in particular are the most important and widespread. If the company that you happen to be researching shows any of these signs, then it may be a good idea to simply look elsewhere. There are plenty of lenders on the market that are hungry for your business and will allow you to negotiate more favorable terms.

The bottom line

As you can see, IT financing can be a very lucrative option for those looking to start a new business or perhaps even upgrade an existing one to a better and more technologically driven infrastructure. If you think IT financing could be right for you and your business then finding a reputable finance company will be your first step. If you take the time to do your research correctly and find a lender with favorable terms, then you will surely put yourself ahead of your competitors who may still be struggling while using outdated or perhaps even non-existent IT systems.

Finance At Your Fingertips

Online payment platforms bring finance from anywhere in the world, to your door steps, to the tips of your fingers at a single click. Our world started trading way back in time and it involved travelling for years on boats with a lot of commodities destroyed and lost along the way. This has become the only way to be able to earn money from people across waters. With technological advances, the world of trading and financial acquisition has improved and easier ways for transactions have been created and established. The rise of technology has, however, gone way far ahead than that of finances that is why the innovations in the financial market had only started recently with the greater demand for convenience.

Although the changes have started with the use of online network servers as bridges that cater monetary transfers, the fees involved are so high that a lot are still unable to participate and others still go back to the old ways of money transfers which still incurs a lot of lapses and loss. With the advancement of technology, people are now able to go to physical financial institutions that allow them to remit and exchange money for a large transaction fee but for a lesser transaction period than the manual process would do. Although this is so, the inconveniences still pose a potential threat with service centers closing at the end of the day and people who work have to either be absent from their jobs or have to do under time just so they can go and send money via these services. Most of the time, the transaction period is long and the inconvenience for both sender and receiver is large since they have to go to centers that allow them to perform the said task.

Now, with these method, we will be able to bring finance closer to home, right at your fingertips. You no longer have to go out and be absent from work, as long as you have a secure server on, you will be able to log in to your online wallet and send monetary remittances or perform foreign exchanges with a single click of your finger. No waiting, no exerting too much effort, just fund your account and you can do it as soon as you want to.

This is a technological advancement working side by side with finance as we bring convenience and control to your own hands doing all possible exchanges and payments over the internet. This platform together with its partners work hand in hand to allow you to do whatever you please with your assets and funds without snooping into your personal data and still keeping it all on a secure communication line so loses are impossible and all transactions are traceable.

UK Finance for Business

Running a business and becoming successful in that venture requires a lot finance and financial assistance. In UK finance for business can be got from different sources. Business related financial services are provided by many organizations in that field. UK finance for leasing a company or organization, UK finance for debt collection, UK finance for Venture Capital can also be arranged.

There are companies that help a business in hire purchasing and arranging for leasing. You can approach such dedicated companies for such services. UK Finance for hardware funding for the information technology business is also available in companies. Leasing services for small businesses, agricultural and industrial funding operations are available in companies dedicated to that service. A company called Richard Mares Asset Finance in UK finances for agricultural and industrial setups. If you need information on UK finance for equipment leasing, mortgages and commercial finance then you can approach companies like 1st Leasing Company and 1pm.co.uk. Many options for UK finance are available with them. Just check out their website for more details on the different types of finance available with them. For UK finance from £5,000 upwards you can approach companies like 1pm. They work closely with their clients to provide what they need.

UK Finance for companies in the information technology sector can get their financing options from companies like Corporate Computer Lease Plc in UK. Such companies make IT more affordable and you get the UK finance for almost any technology spends. They have successful records of financing in UK for even Fortune 500 companies. This is one of the fastest growing UK finance companies.

Companies like Corporate Business Finance fund you for Plant, Machinery and for other corporate financial services. They provide finance in UK for many services like hire purchase, leasing, operating leases, factoring, release of capital, and commercial mortgages. Each and every business may need a unique funding requirement and it is a tedious task to arrange for funding when you need to run your business. A lot of time is wasted in searching for proper funding. Under such circumstances you can approach companies like these for UK finance for your funding requirements.

For new start ups it is difficult to get finance in UK or elsewhere. Most of the finance companies will fund only the established businesses. But companies like Oak Leasing help even the start ups since they understand the difficulties that the startups face. The problems that the start ups face are only initially. If they have a proper business plan they could come up. The team at Oak leasing would finance your startups and for any new equipments that you need. More details are available in their website.

There are companies that fund only the big companies. Finance for big companies is given by UK finance companies like the Benington Securities. It is a private enterprise brokerage. They cover only the corporate investments. There are many companies that provide UK finance for even individuals. Companies like Troman finance provide funds for the individuals and small business firms.

Benefits of Financing Your Business Equipment

The advantages of financing are greater than ever. Any business or organization can benefit from these advantages which include reduced costs, simplified budgeting, credit preservation and flexibility. When it is time for your business to make a financing decision, equipment financing allows you to take full advantage of business opportunities while enjoying critical flexibility and investment protection.

More for Your Money

Many businesses struggle with the need to grow while feeling constrained by a lack of capital. What so many business owners don’t know is that equipment financing can increase your buying power and decrease your expenses. When you finance rather than use working capital, you can afford a more complete solution while making lower monthly payments and paying little or no up-front costs. This leaves your working capital intact while allowing for the needed growth.

The larger the business acquisition, the greater the benefits of financing. For large-scale projects financing can mean the difference between making those changes now and putting them off indefinitely. Putting off necessary changes often means taking your business out of a competitive market position – a position that can be difficult to regain.

Critical Business Advantage

As the business landscape changes on a daily basis, it can be imperative for your own business to adapt and grow to match the market. This is especially true for software and services that are vital but can have large up-front costs. Unfortunately, there are many companies that lack – or think that they lack – the resources required to purchase all of the equipment needed to keep their businesses productive.

Financing can expedite this business transformation by letting you add necessary service capacity, reduce the risk of your technology becoming obsolete and can decrease the total cost of ownership. Equipment financing can provide flexible payment options tailored to your specific budget requirements or timed to match your benefit streams, enabling your company to afford all of the components necessary to maintain a competitive business edge.

Speeding Up Your Business

Other obstacles to keeping businesses moving ahead at an effective pace can include budget constraints and the lack of capital. But emerging markets and those ever present competitors won’t wait for you to catch up. Financing those business purchases means that a lack of capital doesn’t have to cripple your business endeavors.

Equipment financing enables companies to quickly adapt to changing competitive environments, and any business strategy should include access to flexible and competitive financing options. Take some time to research equipment financing companies. The good financing programs offer customers competitive, flexible financing solutions for acquiring hardware, software and any other equipment that your business might need.

Competitive Advantage

It is a simple fact that business solutions are becoming obsolete faster than ever. A customer-focused equipment financing program provides flexible, cost-effective solutions that can help you acquire the technological components that you need to migrate to new business models and to maintain your competitive edge including software applications. This benefit can help ensure that your business never faces the specter of business obsolescence.

You should consider taking advantage of the flexibility that financing offers if your business is in the market for new equipment. This flexibility can help you stay ahead of the technology curve, and ahead of the competition.

A Hedge Against Inflation

With an economy that may seem less than stable, it is important that businesses, especially newer businesses, take advantage of every opportunity that gives them protection against tough economic times. Postponing growth is not necessarily the best way to protect your business as it can result in a loss of customers if you can’t offer them the services that they need or want.

When growth becomes a necessity, equipment financing can allow you to grow the way that you need without making your financial base less stable. The right equipment financing program not only gives you the access to capital that you need for growth but it could also lock in the rates for the loan. This means that you won’t have to worry about your rates falling victim to inflation… ever!

Don’t Fear Financing

The business world can be cutthroat. That’s no secret. So in the quest to keep your own business competitive or to grab a bigger share of the market, don’t let the lack of capital inhibit your plans. It would be nice if we could all expand using only the capital at hand, but that is simply not realistic. Equipment financing can be a very valuable tool and one that offers many benefits. It should not be feared. There are plenty of financing programs available that offer flexible and tailored terms to fit your needs. Do your homework and you will find a lender that will work with you rather than against you. In the long run, that financing could be the most valuable weapon in your business arsenal.

Functions of Business Finance

Strength and soundness of business depends on the availability of finance and competency with which it is used. The abundance of finance can do wonders and its scarcity can ruin even a well established business. Finance increases the strength and viability of business. It increases the resistance capacity of a business to face losses and economic depression. It is just like a lubricant, the more it is applied to the business, the quickly the business will move. Following headings explain the importance of finance to business:

(1) Initiating Business: Finance is the first and fore most requirement of every business. It is the starting point of every business, industrial project etc. Whether you start a sole proprietary concern, a partnership firm, a company or a charity institution, you need ample amount of finance. It is equally important for profit seeking and non-profit activities. It is equally important for a multinational organization and for a free dispensary.

(2) Purchase of Assets: Finance is needed to purchase all sorts of assets. Even if credit is available some down payment is to be made. Mostly finance is needed at the start of business for the purchase of fixed assets. These fixed assets consume a large amount of initial investment of the entrepreneur, so he may face liquidity difficulty in running day to day affairs of the business.

(3) Initial Losses: No business attains high profit on the first day of commencement. Some losses are normal before the business reaches its full capacity and generate enough revenue to match cost. Finance is necessary so that these initial losses can be sustained and business can be allowed to progress gradually.

(4) Professional Services: Certain business need services of specialized personnel. Such personnel have rich experience in specialized fields and they can provide useful guidance to make business profitable. Nevertheless these services are costly. Finance is always needed so that services of such professional consultants can be hired.

(5) Development: Business is always exposed to change. New innovations and emergence of new technologies replaces old techniques out of market. So in order to remain in the market, it is needed to keep the business well equipped with all emerging tools and techniques. This required finance. New technology is always expensive as it is better than others. So finance is needed to purchase new equipment and keep the business running.

(6) Information Technology: Information technology has now changed the geography of the business battle field. The home markets have now extended virtually to other comers of the world. The whole world can be your customer or competitor. To face such a fierce competition, IT is needed. Skills and competency in IT can perform miracles. But finance is again the decisive factor. It is very much needed to incorporate expensive IT products in the business.

(7) Media War: The advertisement and promotion have now become a vital elements for the success of business. The way a businessman approaches a customer and convinces him to purchase his product has become more important than the quality of product. With advertisement on International media, a businessman can reach the minds of millions of people around the globe. However, advertisement is a luxury which every business can’t afford. Huge finance is required to meet advertisement expenses.

(8) Resource Management: Finance is very essential for efficient resource management. Resources here include capital and human resources. Maintenance of plant and equipment and training of employees all need finance. Establishment of new industrial units, expansion of plant capacity, hiring of well learned skilful laborers – all
these factors can lead to huge revenue but at the first place they need finance to start with.

(9) Stock Investments: These investments are those which are made to hold ample stock of raw materials in hand. Bulk purchase of raw materials is profitable in a sense that purchase discount can be attained and there is no danger of production halts. So companies most often hold huge amount of stocks and raw materials. But such an investment can be made only if a company has sufficient capital or finance to carry out its daily operation easily besides holding huge stock.

(10) Combating Risks: Everything is exposed to one or more risks. A business is also exposed to variety of risks. These risks include natural hazards, burden of any huge liability, loss of market or brand name etc. Finance is needed to make business powerful, so that it can sustain occasional losses and liabilities.

Computer Financing

Today’s era is witnessing a tremendous technological as well as economic growth as the computer industry is booming. Computers have become a necessity of every person, as this is regarded as a computer age. This has lead to a requirement of computers in large quantities and buying all of them is quite a cumbersome task. Therefore, in such case computer financing is a viable option.

Computers come in different brands, different configuration and different formats. In addition, because of fast shift in technology, there is big risk of buying computers in mass quantity. Computer technology changes in every quarter of year. These changes are either mostly in computer peripherals and because of which whole computers become outdated. Therefore, investing big capital is not good choice. Then offices require complete updating of their entire system. Here in, one must opt for different computer financing programs available. You can get finance for single computer to as much number of computers as you want. Different types of financing options like lease, fix purchase, discount and soft loan are available.

Different types of computer financing companies provide best of financial schemes for vendors as well as computer buyers. Specially designed finance schemes provide flexibility for computer buyers and vendors. For vendors, companies offer special finance program to maximize their sales and bind customers for longer duration. In addition, they offer mass purchasing of computers for vendors so that they can earn some profit on them.

For computer buyers like corporate offices and other private organizations, lease operating is one of the best options for financing there purchase. Here in, full finance can cover your all expenses fright, installation, sales tax, installation and other secondary investment. This decreases the initial cash outlay. With lease financing one acquire the use of computers at preset cost, but your payment of installments is made with tomorrow’s overblown price. That is why people opt for such computers and equipment financing. In addition, you get finances for the latest upgrades due to constant advancement in technology. Thus, you do not have to worry about future investments. In addition, computer financing can be beneficial in tax returns and can be written of 100 % as operation expenditure. It lowers the cost on current value and reduces tax liabilities. Leasing provides excellent flexibility to overall financial planning by off balance sheet financing.

I addition, soft loan is also beneficial in computer financing. You pay fixed or variable interest rates and at the end of term, you get the ownership of assets you purchase. In addition, you get rental rebate from the reselling of those assets, however, it is not that profitable in case of computer business. Moreover, the loan scheme includes maintenance cost for your machines. Thus, you can keep abreast yourself with latest technology.

Companies offering computer financing for your business purchase provide fast application process, quick sanctions, various mode of payments, and quality services; and all these aspects are very important for computer financing services that includes computer peripherals and other related components.

Determining Particle Finance In Today’s Economy

In the financial sector, wealth determines many things. However, taking a step back to determine wealth itself, introduces an interesting notion. Wealth is being created not by making and selling things, although this is still a large part of the economy, but by taking, trading, and managing risk in the financial sector. Because every asset carries some risk, the market creates ways to lay off the risks we don’t want or can’t bear to an insurance company or by the use of some financial derivatives. The idea of breaking down every risk into smaller and smaller parts was given the name “particle finance,” and modem technology is giving us the means to find the most efficient balance between risk and return.

Charles S. Sanford Jr, who coined “particle finance,” described it in this way: “Risk management is the process of moving clients closer to their desired risk profiles by helping them shed unwanted risks or acquire new risks that suit their portfolios. At times, this can be done simply by matching a client who wants to shed a risk with one who wants to acquire that risk. More often, it involves unbundling, transforming, and repackaging risks into bundles tailors to fit the particular needs of various clients.”

Many of the ways to manage risk turned out to be less than perfect and sometimes gave a false sense of security. The creation of all these new risk-sharing techniques has produced a whole new cottage industry. Hardly any of these derivatives would be possible without the power of the computer.

As economics change, the conventional wisdom often lags far behind reality. Thus, in today’s world of rapid change, old maps and concepts of economic development will no longer help us navigate the waters of the new economy. In fact, they may prove to be as misleading as a map drawn by Gastaldi, the official mapmaker f the Venetian Republic, that showed the Strait of Anion, a body of water linking Hudson Bay with the Pacific Ocean-the so-called Northwest Passage.

Gastaldi’s map was wrong, as no such body of water exists. Nevertheless, it had a profound effect on accelerating the exploration of the North American continent; one adventurer after another sought the fabled Northwest Passage in an effort to collect the huge prize offered by the British Admiralty.

Strictly speaking, there are no economic maps to the brave new world in which we live today, so we must determine at least its general shape without them. What we do know is that intellectual capital, the driver of the new economy can be leveraged indefinitely. Whereas fixed costs may be high, as in the production of a movie or the writing of a piece of software, the marginal cost of replication approaches zero.

Technology Equipment and Software Financing

Technology equipment and software are very important for a business in today’s world. Technological or software equipment includes new computer system, routing software, safety equipment and so on. These types of equipment are generally very expensive and so the need for technology equipment and software financing arises. However most of the traditional lenders may not be ready to finance technological equipment or software. This is due to their inability to understand the purpose and type of this equipment. Therefore an expertise approach is required to understand the need for technological and software equipment. There are some genuine financing companies that offer help to acquire these types of equipment.

There are various categories of technology and software equipment. Therefore various options are allowed by financial institutions to get technology equipment and financing help. Audio visual equipment is one among them which includes cameras, sound equipment and so on. This equipment is really important for companies that specialize in audio video. Seeking the financial assistance of financing companies is required due to high price tags of this equipment.

Safety and security equipment is essential for certain companies. These types of equipment include metal detector, alarm equipment, closed circuit TV, digital video recording, motion detector, security gate, fire suppression and so on. These types are vitally important for maintaining the personal safety and security. Due to its highest price ranges, most of the companies could not afford to buy it. But technology equipment and software financing makes it possible for almost all companies to acquire safety and security equipment.

Telecommunication equipment helps in effective business communication. Thanks to these types of equipment, many companies are functioning properly without any communication gap. Latest telecommunication equipment is available now which helps in effective communication. Broadcasting equipment, multiplex equipment, telephone system, transmitting equipment etc are really important for a modern office. However their price ranges are extremely high making it impossible to afford for small and medium companies. Technology equipment and software financing is the only best option to meet all the essential requirements.

Computer hardware is essential for most of the companies. Since their prices come down, most of the companies can get it easily. The data storage equipment, server, work station, network etc are vitally important for any business in today’s world. But the computer hardware has undergone constant changes. When the existing hardware becomes old, you need to buy a new one. This situation calls for the help of technology equipment and software financing.

Software financing is required to acquire the latest software. The traditional lenders would not be willing to provide financial assistance to buy the software. However accounting software, ecommerce software, manufacturing software, CAD software etc are essential for the business operation of most of the companies. In fact, every company requires certain type of software. Some of the reliable financing companies recognize the need for software financing and they offer essential help.

Since there are no embarrassing procedures for getting the technology equipment and software financing help, any company can apply for the financial assistance from the valid financing company.

Why Companies Should Consider Leasing Computers and Technology

Many companies are not aware of the significant benefits related to acquisition financing in computers and technology segments. The proper term for this type of financing is ‘ Technology lifecycle management ‘. Most business owners simply consider the following question: ‘Should I buy or lease my firms new computers and software and related products and services?’

Two old adages related to leasing still ring true when it comes to the technological aspect. That is that one should finance something and depreciates, and one should buy something that appreciates in value. Most business owners, and consumers as well know very well that computers depreciate in value. Systems we paid thousands of dollars for years ago are now hundreds of dollars. Walk into any ‘ big box ‘ retailer and see the dramatic moves in technology.

Business owners who finance technology demonstrate a higher level of cost effectiveness. The company wants to reap the benefits of the technology over the useful life of the asset, and, importantly, more evenly match the cash outflows with the benefits. Leasing and financing your technology allows you to stay ahead of the technology curve; that is to say you are always using the latest technology as it relates to your firms needs.

Businesses that lease and finance their technology needs are often working better within their capital budgets. Simply speaking they can buy more and buy smarter. Many companies that are larger in size have balance sheet issues and ROA (return on assets) issues that are compelling. They must stay within bank credit covenants and are measure often on their ability to generate income on the total level of assets being deployed in the company.

Lease financing allows those firms to address both of those issues. Companies can choose to employ an ‘ operating lease ‘ structure for their technology financing. This is more prevalent in larger firms, but works almost equally as well in small organizations. Operating leases are ‘ off balance sheet ‘. The firm adopts the stance of using technology, not owning technology. The lessor/lender owns the equipment, and has a stake in the residual value of the technology. The main benefit for the company is that the debt associated with the technology acquisition is not directly held on the balance sheet. This optimizes debt levels and profitability ratios.

At the end of those operating leases, which are usually 36 months long, the customer has the option of:

1. Returning the equipment
2. Buying the equipment ( not likely though )
3. Negotiating an extension of the financing for continued use of the computers, technology, etc.

Companies that have recently acquired computers and technology can in fact negotiate a’ sale leaseback ‘ on those same assets. This financing strategy brings cash back into the company, as the firm has employed a leasing and financing strategy building on our above noted them – using technology, not owning technology.

In summary, the key benefits of computer and technology lease financing are:

* The company can stay ahead of the technology curve
* Computer leasing and financing has significant balance sheet and income statement benefits
* The firm has flexibility with respect to buying new product, returning existing technology, and generating cash flow for purchases already made

Many of the benefits we have discussed relate to leasing in general. However, technology and lease financing are very perfectly suited to the business financing strategy of leasing.