How Many Years Can You Finance Heavy Equipment?

The vast majority of businesses don’t purchase all their tools outright because this would be expensive and cause delays. Instead, they finance some of their items. Almost everything can be borrowed or leased, including office furniture, software, industry-specific tools and machines, and security systems. If you’re looking to finance heavy equipment, you might wonder what kinds of loan or lease terms are available to you.

While it all depends on your individual situation and how stable your business is, most companies qualify for leases of up to five years, and loans can be even longer. It’s important to speak to a professional lender about your situation because there might be possibilities you haven’t yet considered. Read on to find out more about loan and lease terms and how they impact your business.

How Many Years Can You Finance Heavy Equipment? 

At Noreast Capital, the most common lease terms are between 12 and 36 months. However, you can get a shorter lease, for example, if you know you’ll only need a piece of equipment for a six-month project. Alternatively, you can borrow the tools for longer if you need them for many years. Make sure to mention your desired term when you first come to speak to us.

We’ll analyze your financial situation and let you know which terms you are eligible for. We’ll also help you consider whether a longer term is better or whether you could benefit from remaining more flexible. In addition to one, two, and three-year terms, we are also able to offer our clients loans and leases that last for four or five years if necessary.

What About Loans? 

Loans are often longer than leases because you have to pay off the entire balance plus the interest. Heavy equipment costs tens or even hundreds of thousands, so your business might need more than five years to repay the loan. Think carefully about how long you’re going to be needing the tool before signing up for a loan. The last thing you want is to pay for a piece of equipment your business is no longer using.

What Is the Best Term?

When you start your small business, you might think that longer terms are always better because they give you more security. But this might not be the case, especially if you don’t have projects lined up for the next years. Financing equipment for a short while can help you to remain flexible and pivot according to changing market conditions and your customers’ needs.

It’s also important to consider that you don’t always have to give back the equipment at the end of your term. If you still need the same kind of heavy machinery, you can choose to sign another lease for the same item or borrow an updated version. Sometimes, you can even purchase the tool outright, but this depends on the agreement you made with us when you first got the lease.

Lease or Loan? 

Most people lease heavy equipment, which means that the lending company retains ownership, and the business is simply borrowing the tools for a monthly fee. This is a good idea because it allows you to choose whether you’d like to buy the equipment at the end of your term or give it back. It also allows you to access tools that would otherwise be too expensive for you to buy.

The alternative is a loan. This means that you purchase the equipment, but you don’t have to pay for it upfront. Instead, you pay a deposit and agree to a monthly payment, spread out over several months or years. At the end of your loan term, you will have paid off the item, which is now yours to keep. A loan can give you more security, but it can also be more expensive, and there are fewer options.

Advantages of Leasing Heavy Equipment 

There are countless reasons why so many businesses lease their equipment instead of purchasing it outright. The biggest advantage is financial, since this arrangement allows companies to save a lot of money and grow their business more quickly. However, a lease can also help you to remain more flexible and gain access to new equipment more quickly than you otherwise could. Because there are lots of options, you’re sure to find something suitable.

You Can Keep Your Capital 

Heavy equipment is extremely expensive. Even the smallest machines can cost $30-50,000, and some of the larger ones can set you back several hundreds of thousands. If you’re setting up a small business, you’ll have to spend months or years raising funds to pay for your machinery before you can start working. Even established companies might not have the money to spend on multiple large machines.

When you finance heavy equipment, you can start and run your business with a much smaller amount of money. Once you begin to make a profit, you don’t have to spend it all on buying new machines: instead, you can reinvest it into your company to grow it further. By spreading out the cost of your equipment, you can also make budgeting much easier for your finance team, since your expenses will be predictable.

Your Company Can Pivot More Easily 

Projects that require the use of heavy equipment often last for many months or years, so you might need to use the same tools for a long time. However, market conditions change over time, and a piece of equipment that worked for your last project might not be suitable for your current one. For this reason, many companies like to have the option to give back equipment that no longer suits them.

When you lease, you can choose to return, buy, or exchange your item at the end of the term. This means that you can respond to changing markets or customer needs more quickly and therefore save both money and time.

You Can Gain Access to New Equipment

Manufacturers are continually changing the kinds of products they create. Equipment might become more environmentally friendly, cheaper and more efficient to run, and more specialized over time. If you buy your items outright, you might need to use them for a decade or more for your investment to pay off. This isn’t the case when you lease because you can simply give back your equipment at the end of the term and lease something else.

There Are Lots of Options  

At Noreast Capital, we understand that there is no one-size-fits-all solution. That’s why we’ve developed a wide range of options to suit different kinds of businesses. For example, you can take out a capital lease, which allows you to purchase the equipment for a token sum at the end of the term. Alternatively, you can get a more flexible lease that lets you choose whether you’d like to give back your equipment, exchange it for something different, or buy it.

There are also specialized leases for certain kinds of companies. For instance, seasonal businesses can pay more during the busy months and less during the quiet ones, and new companies can delay payments for a few months until they have started to make a profit.

What Kinds of Companies Can Get a Lease?

Companies in virtually all industries can get a lease, as long as the owners can prove that they have a solid financial background. Lenders usually prefer to work with businesses that have been in operation for at least two years, since they are less risky, and they can provide financial documents like bank statements, supplier contracts, and financial statements.

However, you might be able to get a lease even if you’re running a brand-new company. You’ll need to demonstrate that you have assets, provide a personal guarantee, and show documents such as business plans. Initially, you might have to pay a higher interest rate, and you might only be able to borrow a limited amount. Over time, your business will build up a positive reputation, and your lease terms will improve.

The Process 

Getting started with a lender like Noreast Capital is very simple. You reach out to us and tell us more about your company and the equipment you need. We will then analyze your documentation and let you know our decision within a few hours or days. If you want to borrow more than $50,000, we might want to speak to you, and you’ll need to provide more documentation than for a smaller amount.

Once your application has been accepted, you can determine the details of your lease with your account manager and then select the equipment you like. You’ll be assigned one person to work with, whom you can contact whenever you have an issue or would like to borrow an additional item.

Most business owners can finance heavy equipment for up to five years. There are lease terms and conditions available for everyone, so you shouldn’t have any trouble finding what you’re looking for. Reach out to us at Noreast Capital and ask to speak to one of our experts. We can tell you what proof you need to provide, help you fill in your application, and go through your options with you.

What Companies Offer Credit Financing to Purchase Software?

Most businesses with more than one or two employees need software to complete routine tasks such as scheduling meetings, storing customer data, and automating advertising campaigns. In some cases, industry-specific programs are also required. But software can be expensive when you buy it upfront. For this reason, countless companies have selected financing to purchase software.

Getting a loan or a lease is a good idea for anyone who would like to keep their capital intact, regularly gain access to new products, or keep their options open. While you can often finance your purchase directly from the software company, going through a large lending company can be better because you can access a more diverse range of products.

What Companies Offer Credit Financing to Purchase Software?

There are several ways to finance a software purchase. If you already know which program you want and you believe that your needs won’t change in the future, you can speak directly to the company that manufactures the program. However, most businesses would benefit from selecting a large software leasing company that offers software from multiple vendors.

Businesses like Noreast Capital can issue leases or loans to people all over the country. Thus, you can get financing for multiple locations, and you can take your equipment with you when you move to a new office. What’s more, we work with various vendors, so you can get more than one type of software, or you can switch when your current product no longer matches your needs.

Why Choose a Large Leasing Company?

A large leasing company is more flexible and easier to deal with. Once you have a lease line of credit, you can borrow various kinds of software and equipment, and you can switch from one software to another if your company’s requirements change. Normally, the lease terms are between 12 and 60 months, but if that doesn’t work for you, you can select a different term.

In contrast, smaller companies often have a more limited range of products and options, so they might not fit your needs in the long term. Similarly, getting financing directly from software companies can be a hassle because you’ll need to fill in a new application every time you want to purchase from a different manufacturer, and you’ll have to manage all your leases separately. In a big company, your account manager deals with the individual vendors for you.

Software Finance vs Lease Agreement 

There are two ways of financing a large purchase. The first option is to get a loan, which means that you borrow the money and pay back the lender over several months or years. You own the software or piece of equipment right away, and once you’ve paid it off, it’s yours to keep. This option is suitable for people who know that they want the software for the long term but don’t want to spend the money upfront.

The second option is a lease. When you lease equipment, you borrow it from the lender, but they retain ownership. There is usually a fixed term, which might be one or several years. During this time, you can use the software, and you get support from your lender if there is a problem. Once the term is up, you can either pay the remaining amount and keep the equipment, return it to the lender, or exchange it for something else.

Why Finance Software? 

Nearly eight in ten American companies borrow or lease some of their equipment. So, why is this model so popular, and why do firms prefer getting a loan or lease over purchasing tools and software outright? The answer is that buying everything with cash is expensive, and it depletes a company’s financial resources. This slows down growth and makes it harder for businesses to remain profitable.

Additionally, the changing market environment has required businesses in many industries to adapt their services over the last few years. This is much easier when equipment and software can be returned or exchanged. When it comes to software, the available products and their uses change frequently, so it’s best to remain flexible and reevaluate whether your current setup is still working every few months or years.

You Stay Up-to-Date

Every year, new software companies are founded, and they produce innovative products that serve various industries. If you buy a program outright, you might pay thousands of dollars. For this investment to pay off, you have to use software for several years, and sometimes even for a decade. But during this time, newer and better options might have been developed. This means that you’re falling behind and no longer using technology optimally.

Here at Noreast, you can get short-term software leases that only last for 12-18 months. Once the term is up, you can study the market to figure out whether your current program is still the best in your industry. If not, you can let us know that you would like to switch to different software. That way, you’ll never miss out on new developments, and you can build up a reputation as an innovative company.

You Can Pivot 

During the pandemic, businesses in almost every industry had to pivot and offer new services. For example, restaurants and cafes had to focus on takeaways or deliveries instead of allowing customers to consume food and drink onsite. Similarly, shops had to make sure their customers could buy items online, and educational institutions had to switch to online lessons.

Pivoting to adapt to new market conditions is much easier when you have a flexible loan or lease. Instead of having to sell the items you’ve bought and purchase new ones, you can simply speak to your lender and ask them for different software and equipment. While you will have to wait for the end of your term to give back leased equipment, you might be able to upgrade or borrow more at any time, depending on your situation and the terms of the lease.

You Can Keep Your Capital for Other Expenses

Setting up and running a business is expensive. In addition to purchasing software, you might need to rent an office or shop, pay for your staff, buy inventory and raw materials, and advertise your services. The expenses can quickly add up. If you want to conserve as much capital as possible, so you have some reserves should something go wrong, borrowing equipment is a great option.

Instead of spending all your money upfront, you’ll pay a small monthly amount. This makes it easy for you to budget months or even years in advance, since your payment is usually fixed for the duration of your loan or lease.

There Are Solutions for All Kinds of Companies 

Not every business has the same needs. While a large company might be able to absorb the cost of software, a smaller company will struggle to pay for everything right away. Therefore, large lenders like Noreast Capital have come up with a wide range of leases that suit various businesses. When you sign up with us, you can choose a capital lease, which allows you to purchase the equipment at the end of the term.

Alternatively, there are more flexible leases for people who don’t yet know whether they would like to keep or give back their products. If you’re a startup and you don’t yet have any cash reserves, you might be able to delay your payments, especially if the company’s owner has a strong financial background. Seasonal businesses can pay more during the busy season and less during the slow months.

You Have Options at the End of the Term

When leasing software, it’s often best to select a shorter term. Your company’s needs might change in the next year or two, or a superior product could be developed. Because it’s hard to tell whether you’ll still need the same kind of software once your term is up, consider getting a flexible lease. If you like the software you’ve chosen, you can simply renew your contract with Noreast Capital. If not, you can give back the product and borrow something else.

What Kind of Software Can I Lease? 

Almost all kinds of software can be leased. You shouldn’t have any trouble finding general programs that help you with accounting, customer relationship management, advertising, scheduling, and supply chain management. Additionally, there might be specific software available for your industry, such as graphic design programs or software specific to architects.

The best way to find out whether you can gain access to what you need is to reach out to an equipment lender and speak to them directly. Your account manager can help you find suitable software and, if necessary, other types of equipment.

Many businesses now choose to finance software instead of buying products outright. Getting a lease or a loan allows you to remain flexible and up to date. What’s more, you can keep your capital or invest it in the expansion of your business. Get in touch with us at Noreast Capital to find out more about the kinds of software we can offer on finance and to get your lease line of credit. 

Why Would a Company Lease Their Software?

Edited – 1

Most small and medium-sized businesses need software to help them schedule appointments, manage customer relations, deal with finances, manage the supply chain, and advertise effectively. However, good software can be extremely expensive, which is why many firms opt for software leasing. Financing software for small business can be very effective because it reduces upfront costs and facilitates budgeting.

What’s more, it allows companies to remain more flexible and versatile, which is important in current market conditions. Because there are many leasing options, every business can find a solution that suits them well. Today, we’ll have a look at some of the reasons why leasing software is a good idea and discuss how you can get started with a leasing company.

Financing Software for Small Business: Why Choose Software Leasing?

When you lease a piece of equipment, the lessor retains ownership of it, and you are in essence borrowing the item from them. At the end of the term, you can either give it back, keep it, or exchange it for a different tool. For many small businesses, this is an easier and more cost-effective way of gaining access to the necessary equipment than buying everything outright.

Just like furniture, machinery, and industry-specific gadgets, software can be leased for a fixed term. This is great for businesses that want to spend less money upfront, remain more flexible, and regularly gain access to new programs. Good office equipment leasing companies can customize their leases, so they can serve both new and established businesses.

You Can Control Your Finances Better

For very small businesses, the cost of software can be kept low, sometimes even under $100 per month. However, as businesses grow, they often end up paying several thousand every month. This can eat into profits and reduce the viability of a business. If you’re struggling with rising software costs, you should think about leasing programs instead of purchasing them directly from the software company.

You’ll pay the same amount every month for the duration of the lease, so you’ll know ahead of time how much you’ll spend over the course of a year. What’s more, you won’t have to spend any money upfront. This is especially advantageous for new companies because it eliminates the need for funding, but it is also helpful for businesses that want to expand quickly and therefore need to minimize their costs.

You Get Access to the Newest Software

When you buy software, you are making a significant financial commitment to a certain product. When a newer version comes out or a better product gets released, you can’t just switch because you’ve invested so much in your existing software. This can hold back your company’s progress and stop you from making the most of all the IT solutions out there.

When you lease, you can choose to drop software that isn’t working for you anymore or upgrade to a newer version as soon as the term is up. At Noreast Capital, we usually offer leases that are between 12 and 60 months long, but if you’re not sure about a certain program, you might be able to lease it for less than a year.

You Remain More Flexible

Another major advantage of leasing is that you remain much more flexible. Because you haven’t spent a lot of capital upfront, you can easily switch course. This is particularly important in the current market environment because conditions are changing rapidly, and your customers’ needs might not remain the same over time.

For example, many companies that bought software and other equipment struggled to adapt during the COVID pandemic, when they had to pivot and offer new services due to social distancing regulations. In contrast, a company that leased its software could simply request a different program or cancel its lease when the term was up. This saved the business money and made it easier for them to alter their services to fit their customers’ new needs.

There Are Leasing Contracts for Everyone

Leases come in many forms, and they can be adapted to the individual company. When financing software for small business, it is usually sensible to choose a flexible lease, so you have the option to either keep using the program, return it, or select an updated version at the end of your term. When you get in touch with Noreast Capital, we will match you up with an account manager, who can help you gain access to the lease you need.

They will speak to you about your business’s background, your customer base, and why you would like to lease software. Then, they can come up with an agreement that suits your individual situation. If you’re a seasonal company, you can pay more during the busy periods than during your quieter months. Similarly, new companies can delay payments for the first few months so they have a chance to build up a solid customer base.

Leasing Is Tax Deductible

When you buy something, you might be able to deduct the expense from your taxes. However, you’ll only benefit from this deduction for one year, since you’re spending all your money upfront. When leasing, you have an ongoing expense you can deduct from your taxable income for years. This can be a more effective way of keeping your company’s taxes reasonable in the long term.

The exact deduction method and the amount depend on the kind of lease you take out and your business’s tax status. If in doubt, you should speak to a qualified accountant, who can tell you how and where to list your lease on your tax return.

Who Can Lease Software?

Most software leasing companies prefer to work with businesses that have a solid reputation and have been in operation for at least two years. To prove that you will be able to pay your lease every month, you might have to show your account manager your bank statements and trade references. Depending on your company’s industry and the type of lease you’d like, you might also have to provide financial statements.

Startups and businesses that haven’t had time to build up a reputation can still get a lease, as long as the owner has a solid financial background. If you’re not yet an established company, you’ll have to offer a personal guarantee to the leasing company. What’s more, you’ll need to provide documents like supplier contracts, pro forma financial statements, business plans, and the owner’s resume.

What Kinds of Software Can I Lease?

You can lease a wide variety of software, and you can select either one product or multiple IT solutions. Some of the most popular programs here at Noreast Capital include customer relations management software, business management software, accounting programs, scheduling software, and inventory and supply chain management programs. However, we also offer options that are specific to an industry, for example, graphic design software.

Should I Use a Leasing Company?

Many software companies allow you to lease their products directly from them. So, should you choose this option, or should you obtain your products through a dedicated leasing company? Using a leasing business like Noreast Capital is usually best because you’ll be able to lease multiple products from the same company.

If a certain program is no longer working for you, you can simply speak to your account manager and switch to different software. This isn’t possible when you’ve leased your software directly from the company. Instead, you’ll have to end your lease, find a new software company, and apply again. As you can see, this is much more of a hassle.

Should I Also Lease Other Equipment?

The best leasing companies offer a wide range of products. Once you’ve passed the application process, you can lease other products such as business equipment, office furniture, electronic gadgets, and even heavy machinery.

In many cases, leasing several items from the same company is a good idea because it allows you to conserve even more capital and take advantage of the above-named benefits of leasing. Since you won’t have to apply again, the process will be much quicker than if you had to work with each equipment manufacturer directly.

How to Get Started

There are many reasons why thousands of companies around the country are choosing to lease their software and other tools. If you believe that this could be a good strategy for you, you can start by calling or emailing an equipment leasing company. You’ll be matched with an account manager, who will let you know what documentation you have to provide.

Once you’ve submitted your application, you’ll get an answer within a few hours or days. Then, you’ll receive a line of credit, which you can either save for later or use to gain immediate access to the software. Any time you run into issues or would like to lease additional products, you can call your account manager.

Financing software for small business is often a good idea because it allows companies to stay more flexible and up-to-date and reduces the need for upfront financing. Almost all kinds of software can be leased, and there are options for various types of companies. Get in touch with us at Noreast Capital to find out more about our software leasing options and to open your first line of credit.

What Is a Typical Interest Rate on Equipment Leasing?

More and more companies are choosing to lease some or all of their equipment to reduce their initial setup costs, expand faster, remain more flexible, and gain access to tools faster. But a lease isn’t free, and you’ll have to pay interest each month. The typical annual interest rate offered by equipment leasing companies might be between 7 and 13%, but it depends on various factors.

The best way to get started is to speak to a leasing expert and ask them about the kinds of loans you can get. If your company is in good shape and has been in operation for several years, it’s likely that you will get a great deal. However, even newer businesses can benefit from leasing, especially if they need a lot of expensive equipment and don’t want to spend too much time crowdfunding or applying for loans.

What Is a Typical Interest Rate on Equipment Leasing?

Interest rates for equipment leasing vary greatly, and it all depends on your individual situation and the kind of leasing company you select. For loans under $100,000, you can expect a rate of 7-9% if you have excellent credit and go with a reputable lender. However, smaller and less competitive offers might be between 9-20%. You can expect an interest rate of over 10% if you have bad credit or you’re a very new company.

Larger loans are usually cheaper, and you can expect a rate of 6-8%. However, these are only issued to companies that have already proven that they are profitable and reputable. If you’re setting up a startup, you should begin with a smaller lease and always pay on time. That way, you can show the lender that you are dependable, and you will soon gain access to better interest rates.

Factors Affecting Your Rate 

It’s hard to estimate your interest rate without speaking to you in person because so many factors affect the price of your lease. For example, there are various kinds of leases, and some are more expensive than others. What’s more, the duration of your contract makes a difference, since some lenders prefer longer-term leases over shorter ones.

Your leasing company will also need to consider your individual situation and the health of your firm, and they will take into account what kind of equipment you are borrowing. If the tools are prone to breaking or they are very specialized, you might have to pay more than if you’re borrowing standard equipment like office furniture and general electronics.

The Length of the Lease 

Here at Noreast Capital, we typically offer leases of between 12 and 60 months, with the most popular term being 36 months. We often offer better rates on long-term leases, especially if the piece of equipment we are lending is likely to depreciate or become outdated over time.

The Type of Equipment Borrowed 

Not all pieces of equipment are the same, and you will need to consider what you are borrowing. Office equipment leasing can be easier. For example, some standard items like furniture are easy to lend and can be purchased by leasing companies in great quantities. What’s more, such items don’t generally require expensive maintenance and repairs, so they don’t cost the company very much.

On the other hand, some specialized pieces of equipment might only be purchased by very specific types of companies, so it’s harder for equipment leasing companies to lend them to someone else once they’ve been returned. What’s more, lessors often take over the maintenance costs, so this has to be factored into the equation. If you’re borrowing something unique to your industry, you should speak to your account manager about the interest rate.

The Type of Lease 

There are many types of leases, and not all of them will be equally expensive. Businesses that know they want to purchase the equipment once their lease ends can select a capital lease, which allows them to buy the tools for $1. This is a standard contract, so it isn’t expensive to set up. Because you’re paying the same amount each month, the leasing company’s risk isn’t very high, and you won’t have to pay a very high interest rate.

On the other hand, there are some specialized contracts that might require you to pay more. For example, new companies can delay payments for several months as they start to build up their customer base. Similarly, seasonal businesses can pay more during the busy months and less during the quiet months. In some cases, these leases will be more expensive because the lender is taking on more risk.

Your Company’s Age 

Most leasing companies prefer to work with businesses that have been in operation for at least two years. That way, there are financial statements and bank references available, and the profitability of the firm can be evaluated more easily. A company that has been running for many years is more likely to get a low interest rate because there is very little risk associated with lending to them.

On the other hand, a startup is much riskier because most new businesses fail within the first five years. If the company goes bankrupt, the lessor might not receive their money. For this reason, newer businesses have to pay a higher interest rate, and they might also have to provide additional documentation and a personal guarantee from the CEO.

Your Company’s Financial Situation and Reputation 

As mentioned, your financial documentation will be reviewed before we can offer you a lease. That way, we can estimate whether your company is profitable and how much money you can comfortably pay back each month. If you are in great financial shape and you’ve never had any problems with other lenders, it’s likely that we can offer you an excellent interest rate and a large amount of credit.

You’ll have to pay more if you’ve failed to pay other lenders or if there is no evidence that your company is profitable. In such a case, we might start with a small and relatively expensive lease. Over time, you can prove to us that you are a reliable borrower, and we will decrease your interest rate and increase the amount you can borrow.

Why Choose Equipment Leasing Companies? 

Although you can get excellent interest rates, equipment leasing is still more expensive than buying items outright. So, why do so many companies choose this method, and is it worth it? The answer is that leasing can reduce your initial expenses and allow you to invest your money into other aspects of your company.

If you’re a new company, you’ll be able to access the tools you need right away, without having to wait for several months or years. What’s more, you will benefit from increased flexibility because you can give back equipment you no longer need.

Reduced Expenses 

The primary benefit of an equipment lease is that it allows companies to keep their capital. If you borrow some of the items you need, you’ll have money left over to focus on other aspects of your business, such as renting an additional office or shop space, hiring more employees, or developing another product or service that can further increase your company’s income.

Leasing also allows you to plan your expenses more easily. Instead of having to spend all your money upfront, you can spread out the payments and lock in a fixed monthly price for your equipment. That way, your finance team will be able to give you a more accurate picture of your company’s financial health, since there won’t be any unexpected expenses.

Increased Flexibility

At the moment, market conditions are changing rapidly. A piece of equipment that was essential two years ago might not be needed anymore today, and customers who loved one product might switch to another one within a few months. To make sure you’re not left behind, you need to be as flexible as possible. Leasing allows you to pivot faster, since you can simply return or exchange equipment you no longer need once your term is up.

Quick Access to Equipment 

New companies often struggle to access the equipment they require. They might have to spend a lot of time crowdfunding or pitching their idea to investors. By applying for a lease, you can reduce your initial expenses and gain access to equipment even if you don’t have a solid customer base yet. This allows you to start or expand your company faster which is an advantages of leasing.

Equipment leasing companies offer great interest rates to businesses of all sizes and industries. While 7-13% per year is standard, your rate will depend on the kind of lease you’re getting, the equipment you need, your company’s age, and your current financial situation. Call us now at Noreast Capital to find out more about getting a lease from us. We will pair you up with an account manager, who can process your application and help you find what you need.

Why Software Leasing Is a Lifesaver for New Businesses

Your business needs software to run efficiently. If you’re looking for the best options out there, software leasing might be exactly what you need. There are plenty of benefits to leasing software, especially as a new business.

Why Software Leasing Is a Lifesaver for New Businesses

Even in industries that provide hands-on work, software provides important administrative assistance, keeps information organized, and ensures that everything that needs to get done is getting done on time. So that means that buying software is a necessary part of running a business, right?

Not necessarily. Buying software can be a huge expense, but instead of spending more money than you’d like to on the software you need, you might want to consider leasing it, especially if your business is brand-new.

What Exactly Is Software Leasing?

Just like you would lease anything else, leasing software means getting the software from a lender. The lender finances the software while the business uses it for a small monthly fee. This offers new businesses the opportunity to get the software they need without needing to spend the money to buy it themselves.

What Are the Benefits of Leasing Software?

Better Cash Flow

The first few years can be tough financially for new businesses, so finding ways to improve your cash flow is important. When you lease software instead of buying it outright, you’ll find it much easier to avoid strains on your budget. You’ll only need to pay a small monthly fee for the software, while the lender will shoulder the full cost.

More Flexibility

The software that you use initially for your business is going to be a huge help in getting your business up and running. But what about further down the line? At a certain point, your business’s needs are likely to change. So must your software.

But you might hesitate to switch up your software if you’ve paid upfront and don’t want to have to spend any more money. This is another major benefit of leasing instead of buying. It will be much easier to switch to different software, meaning you can always keep up with your business and customer needs.

No Worries About Obsolescence

One of the major downsides of working with digital technology is that there are constant upgrades and updates. This means that the software that you use can become obsolete pretty quickly. When you buy instead of lease, it can be hard financially to keep up with all the latest upgrades.

You’ll have a much easier time when you lease your software. Don’t worry about getting stuck with obsolete software because you can’t afford anything better. With leasing, it’ll be easy to switch to the latest software and keep up with the competition.

Lock in the Price

One of the biggest issues that businesses, especially brand-new businesses, need to face in today’s world is inflation. Prices are continuously going up—and by significant amounts, too. You might end up paying far more if you buy software later than if you buy it now.

This issue can quickly get complicated for new businesses who require software to function but don’t want to have to worry about paying a lot of money down the line for any upgrades you might need. With leasing, the price gets locked in, so you won’t need to worry about significant increases in cost.

Improve Your Business’s Credit

Your business is likely going to need to lease things aside from just the software you use. This is where your business’s credit score comes into play. Keeping a high score so you can get the best leasing deals and contracts will help your business thrive.

When you lease your software and make your payments on time, you are actively improving your credit score. This means that when you need to lease other equipment for your business, you’ll have an easier time getting the best rates.

No Down Payment Required

When you’re leasing certain kinds of equipment, or when you lease from certain lenders, the lender will require a down payment. Down payments, while they may not be the entire cost of the software or equipment that you need, can still put a financial strain on your new business.

If you decide to take advantage of our software leasing options, you won’t need to worry about putting down a down payment. You can finance 100% of the equipment and software that you’re leasing, and you may even be able to include costs for things like upgrades and installation.

Get What You Need Quickly

When you lease equipment and software, you likely don’t want to have to wait long to be able to use the products you’re leasing. New businesses need to be able to move quickly and gain an advantage over their competitors.

Unfortunately, some leasing companies or banks can take weeks to approve a lease. With us, however, you won’t have to worry about waiting that long. Approval will take just a few hours, so you can get what you need and start using it right away.

Tax Deductions

Having to pay taxes can put a big strain on your budget, even when you’re prepared to pay them. Finding ways to save money when it comes to taxes can help you set your business up for financial success.

In the case of most leases, you can deduct the monthly payments. Because the amount you can deduct changes annually, you should make sure that you work with a financial advisor during tax season.

A Customized Plan for You

We know that there’s no one-size-fits-all solution for any business. Your software needs are going to be different from your competitors’ needs. That means that your leasing needs are going to be different too. You need to make sure that you’re getting what your business needs to thrive.

When you lease from us, we’ll make sure that you get the customized leasing plan you need. You’ll easily be able to choose the terms of your lease, as well as what your payment plan should look like. Extend the terms if you need, and upgrade the software and equipment you’re using as necessary.

How to Choose the Right Leasing Company

What Kind of Software Do They Offer?

The most obvious factor to consider is the software that your business needs. We can provide businesses with all types of software. Whether you’re looking for advertising software, point of sale software, or accounting software, we will make sure that your business gets what it needs.

What Is the Cost?

You want to make sure that you are getting software that is effective for your business while also being affordable. That’s why cost is an important factor to consider when you’re looking into leasing software.

We want to make sure that all of our leasing options will provide you with what your business needs while staying affordable. We know that costs can add up quickly for new businesses, so we’ll ensure that our options are right for you.

What Kinds of Leases Are Available?

Different businesses will require different things from their software leases. Some businesses may prefer a shorter term, while others will want to buy the software out at the end of the lease.

When you lease your software from us, we can offer you several different kinds of leases. This includes FMV leases, which are designed to fit with IRS tax guidelines and ensure that you get all the best tax benefits from your lease. We can also offer leasebacks, capital leases, and operating leases.

Who Can Get a Lease?

Some equipment leasing companies may have certain requirements for businesses that choose to lease from them. You should make sure to ask what these requirements may be so you’ll know if this is the right company for you. For instance, many companies will prefer to lease to established businesses.

We will lease to both established and brand-new businesses. For new businesses, you may need to prove that the owners are in good financial health. You may also be asked to write up a business plan and provide other information to show that you are able to fulfill your end of the leasing contract.

What Are Your Options at the End of the Lease?

The lease itself isn’t the only factor to consider when you’re looking to rent software. You should also be aware of what will happen once your lease is done.

We’ll provide you with several different options once your lease is complete. You can return the software you are using without any further obligations on your end. You may also choose to buy out the software, or you can upgrade to different software among other options.

Starting a new business is an exciting venture, but there are a lot of costs that come along with it. You can save money by leasing software instead of buying it. Ready to learn more about how we can help you? Call us today at Noreast Capital.

New Business in Need of Expensive Equipment? Consider Leasing Instead

Increasing numbers of small and medium-sized businesses are embracing equipment leasing instead of purchasing all their tools, machinery, and furniture upfront. Almost anything can be leased, including office equipment, large machines, kitchen items, electronic equipment, and even software. When you lease an item, you have more flexibility, and you can keep your capital and re-invest it in your business.

This is important for new companies that are looking to minimize their startup costs as well as for larger businesses hoping to expand or open another branch. What’s more, company owners might be able to access better or more up-to-date tools, which enhance and facilitate business transactions. Today, we’ll have a closer look at why you should consider leasing certain pieces of equipment and how you can get started with Noreast Capital.

Why Should You Consider Equipment Leasing for Your Business? 

There are many reasons why companies lease some or all of their equipment. The most important one is that they have to spend much less money upfront that way. This might allow business owners to start their company with less money or to invest in expanding their operations at an earlier date than they otherwise could. But these financial benefits are just the tip of the iceberg.

Additionally, leasing allows you to remain more flexible since you can give back your equipment when it no longer suits you. That way, it’s easier to pivot if market conditions change. You might also be able to access better items than you otherwise could, and you can exchange your equipment when it becomes outdated. This is particularly important for people who are looking to use software or other tools that evolve very rapidly.

You Can Keep Your Capital

Established businesses that are making a profit usually have some capital to work with. Therefore, the owners might wonder whether they should use this money to buy their equipment upfront since it might be slightly cheaper. The best course of action depends on the individual business’s strategy and situation, but in most cases, leasing equipment and using the money to expand the company is better than spending everything on tools.

For example, a company that is hoping to expand its operations to a new city in the next few years could lease its equipment and move up the timeline of the expansion. Similarly, a business that is opening a new office in town could do so faster by leasing some of the furniture and buying only the essentials. If you’d like to maximize your firm’s profit, leasing is a great tool.

You Can Remain Flexible 

When you purchase an expensive piece of equipment upfront, it might take you five to ten years to recuperate your investment and profit from the tool or machine. This means that your business is locked in, and you can’t pivot your strategy or purchase additional items for a long time. In the current market environment, conditions can change rapidly, so an inability to pivot can be a big problem because it makes your business inflexible.

When leasing, it’s much easier to adjust your strategy when the needs of your customers change. While the average lease lasts three to five years, you can get a shorter duration of just 12-24 months. At the end of your term, you can either keep the equipment, return it, or exchange it for something else. That way, you have full control over what direction you take your business.

You Don’t Need to Fundraise 

If you’ve ever set up a new company, you know how difficult it is to raise enough money to pay for all the expenses. You have to rent a space, hire employees, buy furniture, buy your industry-specific tools, and pay for ads and marketing materials. These costs can quickly add up to a six or seven-figure amount, and in many cases, it’s almost impossible to raise the necessary funds in a reasonable timeframe.

Leasing is a great alternative because it allows you to reduce your initial investment in your company. Some kinds of contracts allow you to delay payments for several months, so you can build up your customer base and start to generate revenue before you have to worry about your lease. As long as you are financially stable and have a solid business plan, you shouldn’t have any trouble finding a leasing company to work with.

You Can Get the Best Equipment Possible 

When purchasing new things for your business, it’s important not to go for the cheapest kind of equipment for several reasons. Firstly, you might save money by buying excellent items, since they often last longer. Secondly, the quality of your products or services will improve if you work with good tools and machines. Finally, it might be easier for you and your employees to work with equipment that is intuitive and up-to-date.

However, buying the best tools can be very difficult for small and medium-sized businesses due to the high price of the items. Leasing is a good alternative because it allows you to access equipment from excellent brands without having to spend the money upfront. Thus, you can benefit from great quality, but you’re not putting your company’s finances at risk.

Budgeting Is Easier 

Many business owners are excellent at what they do, but they struggle to handle the financials of their company. If you find it hard to budget and plan for your firm’s expenses, equipment leasing could be a good option because the payments don’t change for the duration of the lease. This means that you won’t have to worry about large one-off expenses, and you won’t have to save money every month to buy equipment upfront at a later date.

When you sign up for your lease, you should speak to your account manager about the terms and conditions. Often, maintenance and repairs are included in the contract, so you won’t have to deal with the upkeep of your equipment. This can take even more pressure off your business’s finances, and it minimizes the risk of your tool or machine breaking down and causing unexpected costs.

You Get a Personalized Deal

Leasing companies understand that each business is unique and has its own requirements. For this reason, there are a wide variety of options. If you run a seasonal business, you can get a lease that is more expensive during the peak months and cheaper during the less busy months. New companies can delay payments, so they have a chance to build up their sales without having to worry about spending money on their equipment.

If you’re sure that you want to purchase your tool or machine at the end of the lease term, you can sign a capital lease, also called a $1-buy-out lease. This allows you to buy the item for $1 once the lease is over. On the other hand, you can choose a more flexible contract if you want to leave your options open. Your account manager can help you consider all the options and choose the one that is most suitable.

How to Get Started 

Now you know why leasing business equipment can be a good idea, you might wonder how you can get started with a company like Noreast Capital. Business owners who already know what they need can get in touch and apply for their lease directly. Alternatively, you can open a line of credit weeks or months before you need your lease, so everything is set up ahead of time. When you contact us, you should hear back within a few hours or days.

Qualifying for a Lease 

Most small and medium-sized businesses can qualify for a lease, especially if they have been operating for more than two years. You might have to show your account manager your financial statements, trade references, or bank references. Newer companies will qualify if the business owner is financially stable and able to offer a personal guarantee. Some of the documents that are required for startups include the business plan and supplier contracts.

Finding the Right Option 

As discussed, there are many options, and your account manager will speak to you about the leases that could suit your business. If you’re still building up your customer base, you might opt for step payments, which gradually increase over time. You can also choose whether you would like to pay monthly, quarterly, or annually, and you can select the best lease duration. Most commonly, our terms are between 12 and 60 months.

What Happens at the End? 

When you sign up, you can discuss what happens at the end of your lease term with your account manager. Usually, there are three options: you can end the lease and give back the equipment, return the tools and lease different ones, or buy the equipment. If you already know what you want to do, you can sign a specific kind of contract like a $1-buy-out lease, but if not, you can leave your options open.

Whether you’re just starting out or you’ve been running your small or medium-sized business for many years, you should look into office equipment leasing companies the next time you need to purchase big-ticket items. When you work with a leasing company, you can save your capital, remain more flexible, avoid fundraising, get better pieces of equipment, and budget more easily. Contact us at Noreast Capital to find out more about the personalized, low-cost leases we offer.

What To Do When Equipment Financing for New Business

Every year, countless startups are founded, with business owners hoping to build a long-lasting, profitable company. But unfortunately, most of these new businesses fail very quickly. Within the first year, 10% of startups go out of business, and after the first five years, 80% cease to operate. Due to this high level of risk, it can be hard to get equipment financing for new business.

This is a problem because most startups don’t have the funds necessary to purchase all their equipment. Trying to buy everything in cash can slow you down and prevent you from succeeding. So, what should you do? Fortunately, there are some leasing companies that are willing to lend to new businesses, as long as the owners have a strong financial background and are willing to act as guarantors. Read on to find out how you can get equipment financing.

Can a New Business Get Their Equipment Financed?

If you’ve ever tried setting up a new business, you’ll know how challenging it is to gain access to all the equipment you need. You might have to rent a physical space, purchase office furniture, buy specialized machinery, and acquire computers for all your employees. The cost of these items adds up, and financing some of them can take a lot of the pressure off. But what should you do if most lenders won’t consider you because your company is new?

The answer is that you should keep looking for a suitable lender. There are leasing firms out there who are happy to lend to new businesses, as long as the CEOs provide enough documentation to prove that the business idea is sound. At Noreast Capital, we will consider you if you have a strong financial background and are able to provide a personal guarantee.

How to Get Equipment Financing for New Business

Getting equipment financing can be harder for a brand-new business, but don’t let that deter you because the benefits of leasing some of your items are significant. To get started, you’ll have to make sure all your paperwork is in order, so you can see what assets your company already has and what is still needed. Then, you should consider what type of equipment you would like to lease.

Purchasing some items outright and leasing others could be a good idea because it allows you to reduce the total cost of starting your business, but you won’t have to go into too much debt. Once you’ve determined what you need and what you can afford, you can reach out to an equipment financing expert, who will help you apply for a loan or lease and work with you as you get your line of credit set up.

Get the Paperwork in Order

Before you speak to a leasing company to finance heavy equipment for instance, you need to make sure that your business plan is sound and that you can afford a lease. At Noreast Capital, we usually ask startups to provide us with their supplier contracts, pro forma financial statements, and business plans. If we believe that you don’t have a good foundation to build your company on, we might not be able to provide you with a lease.

Additionally, you should check up on your personal finances. The owner of a brand-new business almost always needs to provide a personal guarantee, but this only works out if he or she has some assets. If you have savings you could use towards the loan or lease if necessary, we are much more likely to issue credit than if you have no money available should your business fail.

Figure Out What You Need

A good leasing company like Noreast Capital will be able to meet your needs no matter what type of items you require. We lease a wide variety of equipment, from office furniture to electronic devices to specialized kitchen equipment. We can also provide you with heavy machinery for construction and with software for accounting, keeping track of client relationships, and more.

Take stock of what assets your business already has, then make a list of the items you still need. You can estimate what each one costs to determine how much debt you will need to take on.

Consider Purchasing Some Assets and Financing Others

No matter what industry you’re in, starting a new company is hard. To get over the initial challenges, many of the smartest CEOs combine equipment financing for new business with purchasing some assets outright. This can be a great option because it allows you to get everything you need without spending all your money or going into too much debt.

The smaller the lease or loan amount, the bigger the chance that we are able to issue it. If you come to us asking for less than $50,000, it’s more than likely that we can help you out. However, brand-new businesses that ask for more than $100,000 are sometimes rejected because the risk level is too high. Once you’re more established, you can always come back to Noreast Capital and ask for a bigger lease.

Reach Out to an Equipment Financing Expert

Once you’ve gone through your paperwork and determined which pieces of equipment you’d like to lease, you can get in touch with us by sending us an email, calling, or filling in the contact form. Your assigned case manager will get back to you as soon as possible and discuss your options. Because we offer leases for a wide variety of businesses, you’ll almost certainly find something to suit you.

For example, startups often choose a step payment lease. The repayments on this lease start low and increase over time. That way, you have time to build up a customer base and make a profit before you have to start paying us. Other businesses choose a seasonal lease, which can be tailored to the fluctuations in income a business experiences. This option is particularly good for seasonal businesses like accountants.

Why Should a New Company Finance Equipment?

Equipment financing for new business is extremely popular. But is it a good option for you? Why should a new company lease its equipment instead of buying it? There are many reasons, but some of the most compelling ones are that a lease reduces your initial funding needs, allows you to remain flexible and current, and facilitates the expansion of your business.

Reduce Your Funding Needs

There are various ways small businesses acquire the funds they need to get started. You might have an investor who is willing to lend you the money, or you might have launched a crowdfunding campaign. But since so many companies are looking for funding, there is a lot of competition, and it can be hard to access enough cash to purchase everything you need.

By choosing to lease or borrow some of your items, you can lower the initial cost of your startup. As profits start to come in, you can then pay off the equipment. This allows you to get set up with a lot less and therefore makes your plan more realistic.

Remain Flexible and Current

Flexibility is one of the most important characteristics of a successful small company. Every year, there are technological advances that change the business landscape considerably. Therefore, firms that want to remain profitable in the long term must be flexible and willing to move with the times. When you buy expensive equipment outright, this can be a big challenge because you’ll need to use it for many years to make your investment pay off.

In contrast, a lease can be as short as 12 months. If you decide that you want to take your business in a different direction, you can simply return the items and choose different ones that better fit your needs.

Expand Your Business Faster

Once you’ve started making a profit, you might want to expand your business further. This could involve offering a new product or service, hiring more employees, or even opening a new office or shop in a different location.

If you’ve been leasing some of your equipment, it’s likely that you have been able to save a larger percentage of your profits instead of spending them on purchasing items outright. This makes the expansion easier and faster. What’s more, you’ll already have a line of credit open with your leasing company, so you don’t have to go through the application process again.

Get the Financing You Need

Getting equipment financing for new business can be hard because they are perceived as very risky. Because 80% of startups fail within the first five years, many leasing companies aren’t willing to lend any money to businesses without a proven track record. However, some lenders will allow you to access equipment financing if you have a good financial background and are happy to act as a guarantor for your company.

To get started, you should make sure all your paperwork is in order. You’ll also have to take stock of your needs and decide which items you want to purchase outright and which ones you want to lease. Then, you can reach out to us, providing all the necessary details. We will assign you a case manager, who can take you through the application process. Call or email us today at Noreast Capital to find out what kind of lease you can access.

How to Lease Equipment

No matter the industry, most businesses need a significant amount of equipment. While it can sometimes make sense to purchase this directly from the manufacturer, leasing can be a great alternative because it conserves capital and allows for more flexibility. It is estimated that over 80% of businesses in various sectors lease equipment.

Fortunately, it is extremely easy to get started. Once you know what items you need and how much they might cost, you can compile all the relevant documents and contact a reputable leasing company. They will make you an offer and ask you to pay a deposit. As soon as you’ve done this, you can take your new equipment to your business location and use it. Today, let’s have a closer look at how leasing works and whether it could be a good idea for you.

How to Lease Equipment

When you get a loan, ownership of the equipment transfers to you. At the end of the loan term, the item is yours to keep. During the lease, the equipment belongs to the lender and you pay a monthly fee to use it.

Once the term comes to an end, most lessors allow you to decide whether you would like to keep your item, give it back, or renew the lease. This is very useful because it allows businesses to operate more flexibly. What’s more, it’s easy to get started, and any business that has been operating for a while and is in good financial shape is eligible for a lease.

Take Stock of What You Need

First, you should take inventory of any items you already have and figure out what else you have to buy. Good leasing companies offer a wide variety of products, so you can lease almost everything you need. For instance, we at Noreast Capital can provide you with office furniture, electronic devices, kitchen equipment, tools related to security, machinery used in construction, and even various types of software.

Together with your team, you should decide which items you’ll need for a long time and which ones you might like to replace every few years. Often, the former can be purchased outright, and the latter can be leased.

Compile the Relevant Documents

Depending on the financial stability of your company and the size of the loan you are requesting, you’ll need to provide certain kinds of documents to your leasing company. If you’ve been in business for more than two years, you will have to show some of your bank, trade, or other financing references. Those requesting large loans should also provide financial statements.

If you’re a brand-new company or you haven’t been operating for more than two years, a personal guarantee might be necessary, but as long as the owner or director is in a good financial position, a lease should still be possible. In some cases, startups will also have to show pro forma financial statements, business plans, and supplier contracts.

Contact a Leasing Company

Once you’ve come up with a list of items you need and compiled all the relevant documents, it’s time to lease equipment from a reputable company. Here at Noreast Capital, every new business is paired up with an account manager, and you can contact this person whenever you have questions or a request.

The manager will speak to you about your business’s background, current operations, and future plans. Then, they can show you what equipment we offer, and you can choose the items that best suit your needs.

Pay Your Deposit

There are various types of leases, and your manager can explain the differences and let you know what each one will cost. For example, the idea behind a capital lease is that you own the equipment at the end, whereas a true lease might offer you more flexibility and allow you to return the items at the end.

When you’ve found a suitable arrangement, you will be asked to pay the deposit. Then, you can take possession of the equipment and begin using it at your business location. The whole leasing process might only take a few hours, especially if you are requesting items that cost less than $50,000. Larger leases require more thorough financial checks, so you might have to wait for two days until we get back to you.

Decide What to Do with the Equipment at the End

Most leases are 12-60 months long, with the most popular term being 36 months. At the end, businesses can decide what they would like to do with the equipment. In some cases, they buy it from the leasing company and continue to use it. However, this often isn’t the best solution, since technology might have improved in the years since the lease was signed.

If this is the case, company owners might decide to give back the old item and choose a more updated version, then sign a new lease. If the nature of the business has changed, the equipment might no longer be necessary, or the owners might want to select something different to meet their needs. As you can see, leasing is very flexible, and it allows businesses to scale their operations or pivot and target a new market at will.

What Are the Advantages of Leasing?

There are many reasons why so many firms choose to lease instead of buy. The primary one is that they can avoid making an upfront investment and therefore keep more of their capital. Additionally, leases offer more flexibility, and there is a suitable option available for almost every business which are advantages of leasing. Unless a company is struggling financially, they are likely to be eligible for a lease.

No Upfront Investment

When you’re just starting out, you might not have enough money to purchase all the equipment you need. In such a case, a lease can be a great way to reduce the financial burden and make your startup more feasible. Instead of having to worry about raising money to purchase your items, you can focus on improving the efficiency of your operations straight away.

Successful larger companies can also benefit from leasing because it allows them to keep a larger percentage of their profits and reinvest them into growing their business. As a result, they might be able to open up another branch or expand into different areas of the country.

Various Options to Suit Companies’ Needs

Every company that wants to lease equipment is different, so lenders have developed a number of options. For example, businesses that operate seasonally can pay more during their busy months and less during quiet times. Similarly, startups that don’t have a large customer base yet can delay payments for a few months or pay less at the beginning and more as they grow.

If you run a special type of business or you have a unique request, don’t hesitate to speak to your account manager. They will be able to put together a customized lease that suits you.

More Flexibility

Leases offer an enormous amount of flexibility. When business owners sign a contract with Noreast Capital, they often don’t know whether they will give back their equipment at the end of their term, sign another lease with us, or purchase the items outright. Depending on market conditions and the direction the business goes in, the CEOs can choose the best option once the lease is up.

Most People Qualify

When offering you a lease, the lender takes on a certain amount of risk, so they have to double-check that you are likely to pay your monthly, quarterly, or annual fee. However, it’s easier than you might think to qualify for a lease. Almost every business can get equipment for up to $50,000, and many can borrow much more.

The best way to find out what kind of deal you can get is to speak to your personal account manager. They can determine whether you need to provide a personal guarantee and what documents are required. In some cases, you can even get a line of credit in advance, which allows you to complete the leasing process faster once you’re ready to borrow some equipment.

Leasing for the Future

Businesses all over the country lease equipment because it allows them to avoid an upfront investment and provides more flexibility. What’s more, there are various options that suit companies’ needs, and most people qualify if they have been doing business for a while or if they have a solid financial background. To get started, you should figure out exactly what kind of equipment you need and then compile your financial documents.

Once you have everything in place, you can get in touch with your leasing company and discuss your situation. The expert assigned to you will offer you a lease and ask you to pay a deposit. Most contracts last for 12-60 months, and at the end, you can decide whether you’d like to extend your lease, buy the equipment, or return it. Get in touch with us now at Noreast Capital to find out more about the equipment we offer and get the leasing process started.

Small Business Equipment: Is it Better to Lease vs Buy?

Expensive equipment is crucial for a wide variety of small businesses. Whether you work in the hospitality industry, construction, security, or you run an office, you’ll need to obtain furniture and specialized tools. Fortunately, there are various ways of gaining access to everything you need without having to purchase your items outright or get a loan. Instead, you can choose small business equipment leasing.

But is this latter option good for small businesses? Can you increase your business’s efficiency by leasing instead of buying? Often, the answer is yes because you can hold on to your capital, remain more flexible, predict your budget more easily, and select a leasing option that works well with your business model. Today, we’ll have a closer look at the difference between leasing and buying so you can choose the solution that suits you best.

What Is the Best Way of Gaining Access to Equipment?

There isn’t one best way of obtaining the equipment you need. Buying tools outright, obtaining a loan, and leasing are all viable options for small businesses. In fact, many companies, especially ones that require a wide variety of items, do all three.

Each of these methods of acquiring goods has advantages and disadvantages, and the one you choose depends on your individual risk profile, the needs of your business, and your future plans. Buying can be a great solution if you know you’ll need the items in the long term, but leasing is better if you’d prefer to keep your options open.

Small Business Equipment Leasing

When you lease a piece of equipment, the lessor remains the owner. They agree to give you access to the tool or machine for the duration of the lease term, which is determined at the start of the lease. Here at Noreast, we typically offer lease terms from 12 to 60 months. During that time, the small business pays a monthly, quarterly, or annual fee that covers the use of the piece of equipment and, depending on the contract, maintenance, and repairs.

When your lease is up, you have several options. Usually, you can choose to buy the item from the lessor, give it back, or upgrade to a different model and sign another lease. This flexibility is why leasing is such a popular option for many businesses.

Purchasing Equipment Outright

Sometimes, it may make sense to purchase a piece of equipment outright. If you choose this option, you have to pay the full price of the item right away, and you become its owner. If you know for sure that you will use a tool or machine for many years and won’t need to upgrade it, this could be a good solution.

However, many businesses find that purchasing all their items is too expensive, especially if they are just starting out or would like to expand their operations in the future. What’s more, owning all your equipment can be a hassle. Whenever you want to change the focus of your business, you first have to get rid of unwanted items, which can take time. When you lease your equipment, it can be given back to the lessor without any hassle.

Obtaining a Loan

Businesses that can’t buy their items upfront often consider a loan. When you finance your purchase in this way, you become the owner, but you only pay a deposit upfront, and the rest of the payment is spread over several months or years. Generally, loans are more expensive and less flexible than leases, but they could be a good option for business owners who don’t qualify for a lease.

Loans have built-in safety nets, so they are less risky for the lender. Therefore, people who have bad credit are eligible even if they can’t obtain a lease. But unfortunately, loans often require a down payment of 10-30%. This isn’t always the case with a lease, so the latter could be the superior choice for businesses that want to keep their capital.

What Are the Advantages of Leasing?

As you can see, there are various options for companies looking to purchase tools or machines. But while buying the items upfront or obtaining a loan can be suitable under certain circumstances, more and more people are opting for small business equipment leasing. Not only is this solution more flexible, but it also allows you to predict your finances more closely.

In addition to the above advantages of leasing, there is a great variety of leases currently available, so almost every firm can find one to suit them. The professionals at Noreast Capital can show you what the possibilities are and help you decide which one would meet your business’s needs.

Keeping Your Capital

One of the primary benefits of leasing is that you get to keep your capital. This is important for small businesses that are just starting out. If you’re setting up your company from scratch, you might not have any money to purchase machines, furniture, and tools, especially if you are also renting office or shop space. A lease can be the perfect solution because it allows you to open your business without having to do a lot of fundraising first.

But established or mid-sized firms that already have a decent amount of capital can also benefit from leasing. Business owners can save the money they would otherwise spend on equipment and use it to expand the company much faster. In this way, leasing can improve the long-term prospects of a business and help it to grow and expand.

Increased Flexibility

In the past, people ran their business in the same way for many decades. But in our fast-moving world, this is no longer possible. Brand-new technologies quickly become obsolete, and many businesses have to pivot several times per decade to meet customers’ demands. When you purchase all your equipment outright, you can’t change your operations unless you sell your items and buy new ones.

Often, this process involves significant losses because equipment depreciates quickly. By opting for a lease instead of an outright purchase, you can remain much more flexible. The average lease term is 36 months, and at the end of the contract, you can reevaluate whether you still need the piece of equipment or not. That way, you can change the way you run your business frequently and keep up with the times.

More Predictability

Many business owners believe that buying equipment outright leads to more predictable finances and lower expenses in the long run, but this isn’t always the case. When a tool or machine you own breaks, you have to come up with the money for repairs, or you have to replace it. But depending on your lease, maintenance could be included in your monthly or quarterly fee.

That way, you know exactly what you will spend each month, and there are no unpleasant surprises. What’s more, you don’t have to spend lump sums, and the cost of your equipment is more spread out. This facilitates budgeting and expense planning.

Great Deals for Everyone

Not every company has the same requirements. Small business equipment leasing is one of the most flexible options out there because there are many types of leases. When you speak to our representatives, they can help you choose the one that fits your firm’s current needs. If you’re a new business and haven’t built up a large customer base, you could opt to delay payments for a few months or pay increasing amounts as your profits grow.

Some professionals, such as accountants and gardeners, run seasonal businesses that are more in demand during certain times of the year. They might be well-served with a seasonal lease, which allows them to pay more during the busy months and less during quiet times. No matter what individual requirements your business has, you’ll find a suitable lease.

How to Find Out More

Now you know how a lease works and why it could be a good option for your business, you might wonder where to turn to. Many equipment manufacturers offer leases, but dealing with each one can be a hassle. Instead, you should contact a lender like Noreast Capital. We work with a wide variety of manufacturers and can therefore offer you all-in-one service.

From us, you can lease a wide variety of tools including specialized machinery, safety equipment, office furniture, and software. When you give us a call or send us a message, we’ll assign a specific person to your case. This professional can then help you with any questions and assist you as you lease equipment.

Almost every small business requires furniture, tools, or machinery. But if you’re just starting out, or you’re hoping to expand your operations in the near future, buying everything outright isn’t the best option. Instead, you could benefit from a loan or small business equipment leasing. Both possibilities allow you to spread out the cost of your equipment, but leasing has some additional advantages.

Because you can choose from a wide variety of leases, you can tailor the terms to your business’s individual needs. What’s more, you remain flexible because you don’t have to commit to a certain piece of equipment for the long term. Get in touch with us now at Noreast Capital to find out more about the financing options we offer and to fill out your application form.

How Can I Affordably Lease Equipment as a Small Business?

With a market size of $178bn, the US leasing industry is enormous. Millions of small and large companies lease their equipment every year, thus benefitting from lower upfront operating costs and access to better equipment and increased security. Whether you’re an established small business in your community or you’re just starting out, business equipment leasing could be the way for you to grow your revenue over the coming months.

Getting a lease isn’t very difficult, especially if you can prove that your company is profitable and that you can easily keep up with your monthly payments. A reputable equipment leasing firm like Noreast can approve you within a few days. That way, there won’t be any delays, and you can begin building your business right away. In today’s post, we’ll have a closer look at how leasing works and why it could be the best choice for you.

What Steps Do I Have to Take to Lease Equipment?

If you’re a small business that is well-respected in your local community, it won’t be hard for you to obtain the equipment you need. In fact, we work with both established and up-and-coming firms, as long as the founders can prove that they are financially stable. To make the application process as simple as possible, you should make sure you have all the relevant documents in place before you get in touch.

Once you’ve decided what equipment you’d like to lease and what your budget is, you can reach out to us at Noreast, and we will assign one of our professionals to your account. This leasing specialist will take you through your application process and help you select the best options. If you have special requirements, they can adjust the terms of your lease to suit your business model.

Take Stock of Your Financial Situation

Before you reach out to us, you should make sure you understand your company’s financial situation. Put together all the documents you might need during the application process, such as your trade references, bank statements, and financial statements. If you have been in operation for over two years and are looking for a small lease, it’s likely that we won’t ask you for much documentation.

However, new companies are considered riskier, so you may need to provide a personal guarantee if you are a startup. When the owners of a business provide us with such a guarantee, they prove to us that they are confident in the success of their firm and serious about their lease. Depending on the situation, we may also require business plans, supplier contracts, and pro forma financial statements.

Decide What Equipment You’d Like to Lease

Our customers lease all kinds of equipment from us. Sometimes, they come to us with a very specific need, for example, if they have been asked to complete a project that requires equipment they don’t own. But at other times, firms are either starting up or expanding and need a wide array of tools. Aside from office furniture, we also offer security equipment and specialized tools for catering businesses and construction companies.

In fact, you can even lease software from us, for example for accounting, advertising, graphic design, or business management. If you’re not sure which items you’d like to lease, make a list of everything you’ll need to run or expand your business. Then, you can decide which pieces of equipment could be leased.

Find a Reputable Business Equipment Leasing Company

There are many lenders out there that offer leases, and some specialty equipment stores have their own programs. But small businesses are almost always best served by an equipment leasing company that offers a broad range of products. Here at Noreast, we can help you find tools, machinery, and software, and you won’t have to deal with each vendor individually.

When you reach out to us, we will assign you a specialist who can take you through the various options. They will discuss the items you’d like to lease and work with you to find the best brands for your business. Then, they can help you compile all the documents you need for your application. Instead of having to deal with various vendors’ requirements and customer service teams, you will always work with the same person when you reach out to us.

Determine the Terms of Your Lease

Not every lease is right for every business, and we’ve developed a wide range of agreements that can suit various situations. The most common lease term is 36 months, although you might opt for 12 months if you anticipate a change in your business or 60 months if you know you’ll use the piece of equipment for a long time. Depending on your situation, payments will be monthly, quarterly, or even annual.

We also offer step payments, which start out low and then increase over time, and delayed payments, which allow businesses to use the equipment for several months before they start paying. Such arrangements are especially suitable for startups and firms that anticipate steep growth in the near future.

Apply for Your Lease

With the help of your assigned business equipment leasing professional, you will select the products you need and then complete your application. You will need to state when you’d like to start using your items, where you need them delivered, and what you will do with them. We will perform a credit check and verify your documents to make sure you’ll be able to pay.

It shouldn’t take more than a few days for you to receive an answer from us. We will provide you with a lease agreement, which you can sign and send back to us. We can then provide you with your equipment as soon as you’ve paid the security deposit.

What Are the Advantages of Leasing Equipment?

Business equipment leasing is straightforward and practical. Whenever you need new furniture, tools, or machinery, you can speak to your experts at Noreast and request a new lease.

Because you don’t need to pay for your items in full upfront when leasing, you will have more capital available to expand your business. What’s more, you may be able to access better equipment than you otherwise could, and you won’t be putting yourself or your firm at risk in the process.

Greater Liquidity

The main reason why people opt for a lease to finance heavy equipment is that it allows them to control their expenses more easily. When you’re just starting out or you’d like to expand your business, you might not have the necessary capital available to purchase all the equipment you need. With a lease, you can avoid a lengthy fundraising process and grow your operations much more quickly.

Because you and the leasing company will agree on the terms in advance, you’ll know what your future monthly expenses are. This allows you to budget and manage your company’s finances better.

Access to Better Equipment

If you purchase a piece of equipment, you want to maximize your investment. It can take years for you to make a profit after buying several pieces of heavy machinery. This can be a big problem because businesses and industries change on a regular basis. Over time, you might want to modify the way your company operates, but this is hard to do when you own a lot of expensive equipment.

When you lease, you can avoid this problem because you can give back your equipment once the term is up. That way, your business retains its flexibility. If you decide that you want to go in a different direction, you can quickly and easily purchase new equipment, and if you no longer need an item, you can give it back without losing money.

Lower Risk to You and Your Business

Business owners who work with a great leasing company such as Noreast don’t run the risk of purchasing substandard equipment. We only work with the best vendors, so you’re sure to be happy with the quality of your items.

What’s more, we will take care of any problems. Companies who lease don’t have to worry about their equipment malfunctioning because the lender is there to assist them. If your machine or software doesn’t live up to your expectations, you can simply get in touch with your account manager. They will help you resolve the issue and make sure that your piece of equipment works well.

Consider Leasing

A wide variety of businesses, from catering firms to building companies, lease their equipment. By working with a reputable business equipment leasing company, you can lower your upfront costs, gain access to the high-quality equipment you need, and lower your company’s risk levels. The process is very easy and only takes a few days, which prevents any delays to your upgrade or expansion.

The best way to get started is to figure out what equipment you need and then discuss your options with our experts. Call us now at Noreast Capital Corporation to find out more about the various leases we offer. We will assign one of our professionals to you and they’ll handle all matters related to your account. That way, we can better tailor our services to your needs, and you can always reach out to the same person whenever you have a question.