What is Commercial Equipment Leasing?

Business owners who need expensive supplies to get started or expand can consider commercial equipment leasing. Leasing equipment is not that different from leasing a car - the business does not own the property, and will therefore be restricted somewhat in its usage. The lease can be given from the equipment manufacturer, another business who is not currently in need of their equipment or through an equipment leasing company. Ultimately, leasing is an option for any business that needs high-end equipment and does not want to purchase it outright.

Uses for Commercial Equipment Leasing

The most common examples of commercial equipment are the heavy machines needed for construction or manufacturing. If you are developing land for your business, you can lease the land moving machines and construction machines you need for the project. When the project is over, the machines go back to the owner. There are smaller-scale examples of commercial equipment leasing that work just as well, though. Even an office that needs copiers and printers can lease the equipment. These machines are very costly, and a business may not be able to afford them in the beginning. Similarly, if the business has only one project requiring a banner printer, for example, the company may lease this machine then return it at the end of the project.

Key Advantages with Commercial Equipment Leasing

The main advantage of equipment leasing is it may be less expensive than purchasing the equipment. This is particularly true if your business only needs the machine for a short period of time. The lease may also be advantageous if you know the technology will quickly outdate itself. For example, it may cost tens of thousands of dollars to get the most up to date servers your information technology department needs to keep your office current. However, in a few years, these servers may be replaced by a technology that is far superior. Instead of buying wholly new servers every few years, you can potentially lease the equipment then turn it in when you find it has become outdated.

Alternatives to Commercial Equipment Leasing

Many businesses will want to own their equipment so they do not face any regulations regarding how much or in what ways they can use it. Similar to owning a home instead of leasing one, you cannot make changes to your equipment or "abuse" it if you do not own it. Many businesses will decide, like homeowners, it is better to invest in the asset and build equity rather than simply pay the money to a company and have nothing to show for it. Owning the asset will give your business collateral for loans, a positive balance sheet and a solid asset you can potentially sell when you are ready to leave the business. If you are purchasing an asset outright, it may be necessary to look into commercial equipment financing. You can get a loan from a manufacturer, retailer or bank to purchase the equipment. This will help you manage the high cost, and it will also build your business credit.