Benefits of Equipment Leasing

Benefits of  equipment leasing

Most leasing companies will simply start by listing all of the normal benefits of equipment leasing  that are on every website on the web, but as you know, they rarely explain in normal, jargon free, language, we hope we have, Oak are different.

 

Gives you a rainy day fund.

The key benefit of equipment leasing is that it will preserve your cash in your company. Every company needs what we call a  rainy day” fund, to cover the unexpected bills that suddenly crop up from nowhere.  You know the sort of thing, a van engine suddenly needs replacing,  money needed to purchase new materials for a  new customer who will help you grow your business. Remember the key phrase in any business, Cash is King!

 

Avoids the bank manager.

Very few people actually enjoy speaking to your bank manger, there is always a certain air of trepidation. Will he ask for extra security to cover the loan or overdraft that he might consider, will he ask for updated management and budget figures?  The terms that banks offer loans now are seen as one of the main obstacles to companies looking for finance from their banks. And remember, overdrafts can be withdrawn normally on 28 days notice!!

When you ask the bank manger if you can include installation, transport, etc,  you will hear the phrase that is very well known, ” computer says No”. With Oak, we say YES!  It will free your bank credit line for other uses, perhaps the need to employ extra staff, or sudden cashflow fluctuations.

Our fixed term equipment leasing  will run for the period of the lease, as long as you make the normal and agreed repayments every month, no 28 days hanging over your head. So you can plan your  future with the confidence of a fixed monthly repayment and a fixed term, and rates are still at historic lows.

 

Everyone’s reason is different.

If you asked companies that use leasing, they will come up with many different reasons why they chose equipment leasing, could be cash flow, might be a rainy day fund, they might require their cash to fund other equipment. New starts need to save their cash, established companies might say, it is the tax benefits. It simply is up to you, but remember no one pays their staff 3 years in advance, so let the equipment work for you and generate the profit for you, but spread the cost. This could be your reason why choose equipment leasing. Equipment leasing can be used for almost any piece of equipment that you can think off, from plant, machinery, furniture, air conditioning shoplifting, North Sea equipment, football pitches, renewables, the list is almost endless!

 

Overplaying the tax side?

Many leasing companies will proudly show you potential tax savings by using equipment leasing.  The key word is potential, the thing to remember in all of these is that you have to be making taxable profits to gain the tax benefits.  Look upon this as a possible benefit , not a cast iron one in your cash flows.  Very few start up companies will be making large taxable profits in year one! If you do, well congratulations!  We would add the following,that leasing is tax allowable only against profits made in each year. Always consult your professional advisor for financial advice.

These are the main benefits of equipment leasing for you, others are useful , such as the fact that you can change or “upgrade ” your equipment during the lease period, to ensure you always have modern and efficient machinery or IT.

 

So there you have it!

In  “jargon free ” language, you now know why customers choose equipment leasing, and we hope this answers your question, why choose equipment leasing.  Oak is known for being transparent, impartial and experienced, coupled with thousands of happy customers, millions funded, we hope that you would consider Oak when your time comes to chose an equipment leasing company!