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What is a Lease Purchase for Equipment Financing?

What is a Lease Purchase for Equipment Financing?

Leasing Equipment instead of making outright purchases has many advantages, especially for new or expanding companies. A Lease Purchase Agreement enables you to obtain equipment that you may otherwise be unable to afford, but that you need to grow your company and increase your profits. It allows you to purchase the equipment to increase revenue while you pay it off over time.

Lease Purchase Benefits

This popular method of obtaining new equipment has many benefits to enjoy. You have the same responsibilities as you would for any equipment you own, such as maintenance and insurance but you get the benefit of revenue now versus saving t up. You gain tax benefits to offset the cost of the monthly lease payments, and there are multiple advantages with leasing versus buying, including your low initial monetary requirement.

  • Free up cash flow for other necessities

  • Low initial money upfront; great advantage for new or growing businesses

  • Upgrade to the latest technology at minimal costs

  • Equipment can be returned for newer technology at end of term (if high tech equipment)

  • 100% financing – no down payment or additional collateral required

  • Speedy approvals; less than 24-72 hours for most from Brickhouse Capital programs

  • Builds business credit

  • Tax benefits – up to 100% monthly deductible write-off for leased equipment

  • Shipping, set-up, training and other initial soft costs included in lease

Potential Disadvantages

These are small, compared to the benefits of using the lease purchase option. As with any major purchase, it is important to first determine the potential impact this purchase will have on your bottom line and profitability.

Here are several things to consider before you sign a lease purchase agreement:

  • Long term costs for equipment are higher than outright purchase costs

  • No ownership until you actually purchase the equipment; costs at end of lease may still be prohibitive

  • Tax benefits may or may not occur; always consult with your own tax advisor first

Why Lease Now?

If you have a new business or are about to expand an existing one, you should consider the benefits of lease purchase for new equipment you need to make those improvements. You can purchase the equipment at the end of the lease for a $1 or write an operating lease with a balloon payment to reduce the monthly payments throughout the lease.

Buying expensive equipment up front requires a large outlay of cash, which takes a long time to save up for and reduces your ability to take on more work if you get busy. It can also deplete or cripple your cash flow, your ability to purchase other necessary equipment and supplies and it could jeopardize your ability to grow. By leasing, you can easily upgrade to new technology of necessary, or own collateral at the end if they useful life is long and doesn’t require many upgrades.

Simplicity for Lease Purchase Agreements

With Brickhouse Capital, you benefit from working with a direct lender who is flexible in approval decisions. Most of our leases do not require extensive financial statements or any at all. Often just a one page application is sufficient to obtain leases of equipment up to $250,000 or more.

Join the large percentage of modern businesses that are using equipment financing to grow and expand their businesses without hurting their cash flow and finances. Build credit, save time and get your business on track for success quickly.

For more information about Lease Purchase for Equipment, please contact Brickhouse Capital today. We serve clients throughout the United States. Call us now, at (480) 948-5500.