According to the US Small Business Administration, 80% of businesses lease a portion of their equipment. These businesses include small family owned businesses to Fortune 500 Companies. Because of the myriad of benefits equipment leasing can provide, it has become a crucial tool for growing companies today.
Along with providing significant tax and cash flow advantages, equipment leasing can provide your business with a number of other benefits that allow you to maintain cash reserves, increase cash flow and help preserve your existing lines of credit. Equipment leasing also affords business owners the ability to grow their businesses without significant out of pocket expenses.
Here are the two most popular reasons people choose leasing:
1. You can write off 100% of your lease payments from your corporate income because the IRS does not consider an operating lease to be a purchase. This write off can even out pass the tax advantages of bonus depreciation and accelerated depreciation.
2. Speed. Bank loans and SBA loans seeming take forever and you have to provide a significant amount of tax return and financial information to obtain them. Because Equipment Leasing has a simplified underwriting process and typically doesn’t require and financial information, most approvals can come back in just a few hours.