Leasing industrial equipment can be a great way to get the tools you need for your business without breaking the bank. But before you sign on the dotted line, there are a few things you need to know. In this post, we’ll outline what you should consider when leasing industrial equipment, and offer some tips to make sure the process goes as smoothly as possible. Read on to learn more!
What is industrial equipment leasing, and how does it work?
Industrial equipment leasing is the process of renting equipment for a set period of time. This can be a great option for businesses that need to update their equipment regularly, or that only need industrial equipment temporarily. Leasing heavy equipment is also more affordable than buying it outright.
When you lease industrial equipment, the leasing company will purchase the equipment on your behalf and then rent it to you for a set period of time. At the end of the lease, you will have the option to purchase the equipment.
The benefits of industrial equipment leasing
Leasing heavy equipment can offer a number of benefits for businesses. Some key benefits include:
- Reduced upfront costs: When leasing industrial equipment, businesses can often reduce their upfront costs, as they do not need to pay the entire cost of the equipment upfront. This can free up cash flow for other important business expenses.
- Easier budgeting: Leasing industrial equipment can also make budgeting easier for businesses, as they can spread the cost of the equipment over the term of the lease. This can be especially helpful for businesses that may not have the up-front cash to purchase heavy equipment outright.
- Flexibility: Another benefit of leasing industrial equipment is that it can offer businesses greater flexibility, as they can often choose to upgrade their equipment. This can be helpful for businesses that are growing and need to regularly update their equipment.
- Off-balance sheet financing: When businesses lease industrial equipment, the equipment is often treated as an operating expense, meaning that it does not appear on the business’s balance sheet. This can be beneficial for businesses as it can help to keep their debt levels down.
- Tax benefits: In some cases, businesses may be able to claim tax benefits when they lease industrial equipment. These benefits will vary depending on the Province in which the business is based, but they can provide significant savings.
How to choose the right industrial equipment leasing company
When looking for a leasing company, it is important to do your research. You should ask around to see if anyone you know has had any experience with industrial equipment leasing companies. Once you have a few companies in mind, you can start by looking at their websites.
You will want to consider the following when choosing a leasing company :
- if they actually lease industrial equipment. Some companies may only lease office equipment or vehicles. For instance, at Finco, we have specific expertise and specific programs for industrial equipment leasing.
- Industrial equipment terms. You want to make sure you’ll get the best deal for your business. Remember that equipment financing terms are the specific details of your leasing. These will include the monthly amount payments, the length of the financing, and the overall amount. It’s important to understand the equipment financing terms before signing any paperwork, as they will affect how much you pay for the equipment in the long run.
- Customer service. A good industrial heavy equipment financing company, like Finco, must be responsive and have a good reputation. Contact us to get a customized leasing solution for your future industrial equipment.
FAQs about industrial equipment leasing
Differences between leasing equipment and loans
They’re both a great way to get the newest technology and tools for your farm without having to pay the entire cost upfront. You can avoid making a large purchase and spreading out the payments over time can help keep your cash flow healthy.
The biggest difference between leasing and equipment loans for industrial equipment is the financing terms. When you lease, the monthly payment is usually lower than with a loan.
What is the leasing payment schedule?
The leasing payment schedules are typically made up of fixed payments and a residual value at the end of the contract. This residual value guarantees that the equipment will be returned to the same condition as when it was leased.
Do I need to make a down payment for an equipment lease?
Down payments are typically not required for equipment leases, but it is important to check with the leasing company to confirm. Making a down payment may help you secure a lower monthly lease payment, so it is worth considering if you have the funds available.
How do I find out what my lease payments would be?
Estimating lease payments is easy. Contact us today to get your customized quote.
Can I lease used industrial equipment?
Yes. In fact, just like new equipment, leasing used equipment can be a great way to get the equipment you need for your business.
Can I include inspections, shipping, and customs fees in my equipment lease?
Yes, you can include inspections, shipping, and customs fees in your equipment lease. These additional costs will be factored into your lease payments.
How long does the approval process take on an industrial equipment lease?
It depends on the financial company. At Finco, with our 3 easy steps process you can get approved within 24 to 48 hours.