If you're thinking about starting a landscaping business or already have one and you need some new equipment, consider leasing your new equipment. Acquiring new landscaping equipment in the form of leasing is an excellent way to start or grow your business. There are several benefits of leasing your equipment over paying cash for your new additions.
First, a lease typically allows you to take possession of your new equipment with just one payment due at the signing of your lease. This is huge for a newer or expanding business that might be cash strapped. Use your cash for other necessities such as payroll, insurance, gas, truck payments, marketing, etc. Leasing is always a good idea and it helps you hang on to your precious working capital.
Secondly, there are tremendous tax and accounting benefits associated with leasing. Often times leasing eliminates the need for complicated depreciation schedules since the payments are generally line item expenses on your business's profit and loss statement. Also, since lease payments are normally treated as a pre-tax business expense, you might even reduce your taxes liabilities.
Thirdly, when you lease your landscaping equipment, you enjoy the peace of mind associated with a fixed payment for the entire lease term. Many business loans have adjustable loan terms. Given the current credit crunch, we've all seen what can happen with adjustable loans. Fluctuating payments can be financially taxing and very stressful. When you lease, you don't have to worry about rising payments because the payments fixed. This makes for easy stress free bookkeeping.
These are just a few of the benefits of leasing your equipment. Sometimes people shy away from leasing because they are only familiar with a car or truck lease that generally has a 30%-40% residual. A 30 or 40% residual makes it hard for someone to act on their option to buy at the end of the lease term. It's different with equipment leasing and often times it more like a lease to own situation. Sometimes the residual is only one dollar or $101.00. The leases can also be structured with a ten percent or twenty percent residual. This is good if you don't think you'll want to keep the equipment in the long run. It means a lower payment now, but at the end of your term you can walk away or act on the purchase option.
Leasing is an excellent choice. If you're in the market for new landscaping equipment, it's the leased you can do for your business.