Every business needs some form of specialized equipment to make their company a success. The right equipment can make your job easier and faster, and it can also make company growth more feasible. Unfortunately, most companies also run into situations where they experience a gap in cash flow or need more cash than they have on hand to meet a big goal, like launching a marketing campaign. Here’s why equipment leasing and lease buybacks should always be on your radar.
For a lease buyback, a company sells equipment they own to a leasing company, and their equipment is then leased back to them. They don’t own the equipment anymore, but they can continue to use it, and they can use the cash from the sale for other expenses. This process makes it simple to get more cash without interrupting daily operations.
If the same company were to seek out a loan, there’s a chance they would have to offer up the equipment as collateral or pay large monthly payments that could impact the financial health of the business.
Many leasing companies take care of all cleaning, repairs, and other types of maintenance for their equipment. When you participate in a lease buyback, you get to use the same equipment you’re familiar with, but don’t have to worry about fixing it if something unexpected happens. You also don’t have to worry about vetting potential repair people, since the leasing company likely already has established relationships with repair companies they can send your way.
When you buy equipment outright and don’t have the budget for any replacements, you may have to use that equipment until it breaks. Leasing equipment makes it easier to upgrade to newer and better models of the same equipment, and the process is easy. Once your lease is up, you can lease new equipment, and never wind up stuck with obsolete tools.