Industrial machinery and heavy equipment are costly and typically need a one-time investment. If you own or run a business, you know that one mistake may cost hundreds or even thousands of dollars.
Contracts that enable you to finance a piece of heavy machinery over time are known as flexible lease options. While some options, like an operating lease, let you use the equipment temporarily, others, like a capital lease or a sale-leaseback, let you eventually purchase the item. The needs of your business, your financial situation, and your goals for when the lease expires will all play a significant role in this. When it comes to leasing equipment in Abbotsford, here are some of the flexible leasing options:
- Capital Leases: Often referred to as “$1 buyout leases,” capital leases ensure both a low asset purchase price at the end of the agreement and predictable monthly payments. If you want to buy the equipment listed in the buyout conditions and keep it for your company for a long time, this is perfect.
- Sale/Leaseback: This is a special kind of financing if you own an asset. You can use your own heavy equipment as collateral rather than waiting to get approved for a loan. Leasing a piece of equipment that you previously owned is the essence of a sale leaseback. You can keep using your equipment and save some cash for other enhancements or business-related costs.
- Operating Equipment Lease: This adaptable lease choice is commonly known as a “fair market lease.” Because the lessee can either buy the equipment for market value or return it at the end of the lease, this is typically the least expensive option. Since the lease payments are a component of operating expenses, they are tax deductible. To achieve short-term company objectives and purchase equipment at a lesser cost than renting, an operating lease is frequently utilized.
- Purchase Upon Termination (PUT) Lease: This kind of lease, like a capital lease, establishes a price for the machines at the end of the term. By committing to buy the asset at the end of the term, the purpose is to restrict risk while lowering lease payments, making it less expensive each month than a capital lease.
Benefits of Flexible Heavy Machinery Leasing
Similar to a rental agreement, the equipment provider enters into a lease with you. This is written in a lease agreement and details the monthly cost, the coverage, and any stipulations for buying the equipment when the lease expires and you decide you want it.
- Consistent Budgeting
- Improved Cash Flow
- Instant Taxable Benefits
- Simple to Modify or Update Heavy Equipment
You will be able to end the lease under certain situations, which will be detailed in the agreement. Sandhu & Sran Leasing & Financing is a trusted equipment leasing company in Abbotsford providing one of the best deals for small and mid-sized business owners looking for reliable equipment leasing and financing services. For more details about our services, give us a call today.
