Equipping your business with the latest AEC technology can be expensive. Still, leasing equipment can be a cost-effective alternative to financing or purchasing equipment.
Let's examine some common questions businesses have about leasing equipment, the advantages of leasing versus purchasing, and the types of equipment that TAVCO offers for lease.
Is it Better to Lease or Finance Equipment for Business?
When deciding between leasing or financing equipment, the answer depends on your business needs and financial goals. Traditional financing, like through a bank, can provide long-term equipment ownership, but it also requires a significant upfront investment and can tie up your credit.
Leasing offers lower upfront costs, predictable monthly payments, and flexibility to upgrade to the latest technology. With leasing, you don't have to worry about the risk of owning outdated equipment. Additionally, you can conserve your credit for other business expenses.
How Hard is it to Get AEC Equipment Financing?
Getting equipment financing can be challenging, as it typically requires a strong credit history and financial stability. In addition, many lenders also require a down payment, collateral, or a personal guarantee.
On the other hand, leasing equipment can be easier to obtain, as leasing companies typically have more flexible credit requirements and may not require a down payment or collateral.
What is the Credit Requirement for Leasing Equipment?
The credit requirement for leasing equipment varies by the leasing company. Still, leasing companies will generally consider factors such as your credit score, business history, and financial stability. Some leasing companies may also require a personal guarantee or collateral when leasing equipment.
What are the Types of Equipment Leases?
The two primary types of equipment leases are operating leases and capital leases. Operating leases are typically shorter-term leases that allow you to use the equipment without owning it.
Capital leases, also known as finance leases, are longer-term leases that include a buyout option at the end of the lease term, allowing you to own the equipment eventually.
Are Equipment Lease Payments Tax-Deductible?
Yes, equipment lease payments are tax-deductible as an operating expense for your business. This tax benefit can offset the cost of leasing equipment and provide additional financial savings for your business.
Why Would a Company Lease Equipment Instead of Buying it?
Leasing equipment can be a better option for companies that need access to the latest technology but want to avoid making a significant upfront investment or owning outdated equipment.
Leasing also provides more flexibility to upgrade to the newest gear. In addition, it frees up credit and cash flow for other business expenses.
In addition, leasing equipment can offer tax benefits and predictable monthly payments, making it easier to manage your business finances.
What Equipment Can Be Leased?
TAVCO leases a wide range of business equipment, including office equipment like plotters, large-format MFPs, and scanners, as well as 3D LiDAR scanners and CAD software, such as BricsCAD CAD software, and 24/7 storage.
Office Equipment - Hardware
Plotters and Large-Format MFPs: TAVCO offers Canon and HP plotters and large-format MFPs, allowing you to align your office equipment with your specific needs.
Scanners: You can lease wide-format standalone units from Contex or 3D LiDAR scanners from Leica and Matterport. These industry "must-haves" can save time and increase productivity.
How Much Can You Write Off on Equipment for Business?
Businesses can deduct up to a certain amount of their equipment purchases from their taxes as an expense under Section 179. For the year 2022, companies can write off up to $1,050,000, while for the year 2023, the limit is $1,160,000.
Additionally, businesses can also claim bonus depreciation, which is currently 80% for equipment placed in service in 2023. The IRS guides how to elect these deductions and use the alternative depreciation system. For more information, visit the IRS webpage for Section 179.
Why Lease Business Equipment?
Leasing business equipment offers many advantages, including:
• No substantial initial investment - Leasing allows you to spread the cost of equipment and assets over their useful life in predictable monthly installments, protecting your cash flow. Most companies lease through TAVCO and usually opt for a $0 payment down option.
• Include Maintenace - Some companies design lease contracts to ensure that you do not incur extra out-of-pocket expenses or surprise repair costs.
• Conservation of Credit Sources - Leasing your business equipment conserves credit sources for other expenses such as hiring, advertising, repairs, inventory, or market expansion.
Leasing from TAVCO offers competitive rates, special programs like the Baker's Dozen or deferred payment terms, and leases ranging from 12 to 63 months. You can even include a service contract or extended warranties in your equipment lease so that you can make one convenient payment.
Final Thoughts About Leasing Equipment
Leasing business equipment is a wise choice, allowing you to equip your facilities with the latest technologies without worrying about the high risk of purchasing high-end equipment.
TAVCO offers a wide range of equipment and assets critical to your operation, including office equipment, software, construction equipment, industrial machinery, and vehicles. With competitive rates and flexible lease terms, leasing from TAVCO is the perfect way to enhance your operation.
Want to learn more about your leasing options?
Contact a TAVCO leasing professional today to learn more about how equipment leasing can benefit your business.