Many customers prefer to avoid buying equipment outright. Capital costs are high and so are the risk: clients never really know whether they will get to enjoy the full value of the equipment before having to sell it. For this reason, brands are increasingly turning to firms that can offer equipment leasing solutions instead. This way, they can spread their costs over a longer time horizon, avoid large outlays that harm their cash position, and simply pay for the equipment services they consume. Unfortunately, relatively few intermediate sellers actually offer leasing options. They instruct customers that they can either buy the items outright (and attempt to sell them later as salvage items), or get them on finance, taking on both liability and ownership. Neither of these outcomes is ideal. We explain how cost-effective equipment leasing can make your customers happy.
Business owners spend a lot of time trying to figure out what they can do to improve their day-to-day cash flow. The best solution for the vast majority is to simply lease what they need, thereby avoiding the cost of an initial outlay.
Leasing is a little different from standard solutions. Here, the lessee (the person taking out the lease) commits to making monthly payments to the lessor (either the bank, a manufacturer, or you) for the period they use the equipment. Hence, they aren’t taking ownership of the items they receive. Rather, they simply use them for the services they require, and then hand them back to the lessor when they no longer need them.
Are leases good value for money for customers?
Lessors calculate the price of a lease based on several factors, including:
- The prevailing rate of interest (and the risk the lessee poses the lessor, according to their credit rating)
- The terms of the lease
- The cost of buying the equipment from the original manufacturer (or in the case of a manufacturer lessor, the cost of paying for the labour and materials to construct the item)
Lease approvals tend to be relatively quick and require less paperwork than conventional business loans. Furthermore, they qualify as tax-deductible expenses for many businesses, making them more appealing. All clients have to do is perform a cost-benefit analysis to work out whether taking out a loan is the best option for them.
Cost-effective equipment leasing – find out more
Tower Leasing can help you structure deals that provide first class value for money for your clients, keep equipment up to date and easy to scale, get more now and better user experience are just some of the reasons businesses are now turning to leasing for their new equipment.