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Is It Difficult for a Small Business to Get an Equipment Lease?

When starting or expanding your business, you will need equipment such as furniture, electronic devices, and software. You can either choose to buy them outright or to borrow them using a lease or loan. The latter option is often preferable, especially for small businesses that might not have the resources to buy all the top-notch tools they need. An equipment lease allows you to conserve your capital while remaining flexible at the same time.

But how hard is it for a small business to receive such a lease? Will it be prohibitively expensive? The answer is that several factors affect your eligibility, and they include the age of your business, your financial stability, and the size of the lease you are asking for. Today, we will have a closer look at how we evaluate businesses and what you can do to increase your chances of a positive outcome.

How Hard Is Getting an Equipment Lease? 

It’s not always easy for a small business to get started. If you have a physical location, you will need to pay for staff, rent, furniture, and professional equipment. Having to pay for everything upfront might make it almost impossible for you to open a new branch. However, this isn’t usually the case. Lenders such as Noreast Capital allow you to lease your equipment so you can spread out the cost and allow your business to grow before you pay.

When considering you for a lease, we will take several factors into consideration. Depending on your company’s age and the profit you are making, we might offer you a lease line of credit. When you’re ready to borrow your first piece of equipment, you won’t have to apply again, and we will simply be able to provide it. Your personal account manager can let you know how much you may be able to borrow.

The Age of Your Business 

A crucial factor is how long you have been in operation. Most lenders prefer companies that have been running for at least two years because they have had time to become established and make a profit. Such businesses have records of their sales and expenses, which allows creditors to see whether they are making a profit and how much they will be able to pay.

However, just because you’re a new business doesn’t mean you won’t be eligible. There is a chance that you can borrow from us even if you are just getting started. To make a decision, we will look at the financial background of the owners. You will almost certainly have to back your lease with a personal guarantee in such a case, and we might ask you for additional documentation like your business plan or your supplier contracts.

The Financial Health of Your Business 

Every high-quality lender will do their due diligence before issuing a small business with a lease. When you apply to Noreast Capital, we will require you to provide certain financial documents. They include bank statements, trade references, or financial statements. To make the process easier, you should have all your paperwork in place before you contact us.

Once you have provided us with the necessary documentation, the equipment lease application process is surprisingly straightforward. Depending on the size of your lease, you might receive an answer within a few hours or a few business days. You can then select the tools that best fit your needs and either pick them up or have them delivered to your location.

The Size of the Lease 

Before providing you with a lease, we will check that you are able to handle the amount you applied for. Smaller and newer businesses should get started with a minimal amount so that they don’t run into problems later on. As your company grows, you can then increase the size of your debt to help you expand faster.

In general, amounts under $50,000 are reasonably easy to receive. If you are an established firm, you won’t even have to provide us with financial statements, and the application is a simple one-page form. Any amount over this threshold will be checked more closely since your monthly payments could be substantial.

Ways to Ensure Eligibility 

As you can see, getting a lease for your business isn’t extremely difficult, but lenders do check that you have a sound financial background. The process is easiest for businesses that are over two years old and are able to demonstrate solid and steady performance. If you don’t fall into this group, there are several ways you can ensure eligibility.

For example, you can back your lease with a personal guarantee, which means that you will be liable if your business can’t pay. Alternatively, a guarantor with a stable background could help. Your account manager might ask you to provide documentation such as your business plan, resumes from the company’s founders, and pro forma financial statements, which can prove that you are experienced in your field and on track to make a profit.

Why Leasing Could Be a Great Strategy for You 

Getting a lease is possible for most businesses, but it will take some time and effort. Is it worth the hassle? In most cases, the answer is yes. Not only can you conserve your precious capital, but you can also remain flexible and adapt to changing market conditions more quickly. The type of lease you get can be tailored to your company’s needs, and you can choose from a wide variety of equipment, no matter what industry you operate in.

Conserve Your Capital 

Arguably the most important reason why you should lease your tools is that this allows you to conserve your money. If you are a new business, you might not have the option to buy everything you need, so leasing is the way for you to start out with high-quality equipment. For more established businesses, it is a way to grow faster and reinvest your capital to expand the company.

When opening a new branch, you might have to pay for additional employees as well as rent. This can be enough of a financial burden, and leasing the furniture and equipment can take some of the pressure off. That way, you might be able to expand faster and therefore make more of a profit in the long run.

Retain Flexibility

Another key benefit of an equipment lease is that you don’t have to lock yourself into an expensive deal. Our terms are often between 12 and 36 months, and at the end of the lease, you can choose to keep the tool, give it back, or take out another lease. If your needs have changed or the market is different, you can simply choose something else.

This is particularly important when it comes to equipment that is time-sensitive, such as electronic tools and software. These items need to be updated frequently, but they can also be extremely expensive. By getting a lease, you can stay on top of current trends and upgrade much more frequently, since you didn’t spend all the money upfront.

Choose a Plan that Suits You 

Every company is different, which is why we at Noreast Capital offer such a wide range of leases to suit various needs. If you already know that you would like to buy the equipment at the end, you can go for a capital lease, which allows you to purchase the objects at a minimal price, such as $1, once your lease is up. If not, you can opt for a contract that offers you multiple possibilities at the end, such as giving back your equipment or upgrading.

Brand-new business might benefit from a special contract that doesn’t require payment for the first few months. You will be able to build up a clientele before having to worry about paying for your equipment. Similarly, seasonal businesses can pay less during the quiet months and more when they are busiest to prevent cashflow problems.

Choose from a Wide Variety of Products 

In terms of the equipment you can lease, there is an enormous variety available. In addition to furniture, you can also choose from a wide range of industry-specific tools and electronic gadgets. In fact, we even offer software for accounting, client interaction, graphic design, and more. No matter what you need, you should speak to our customer service team, who can present you with all the options.

Getting an equipment lease can be a challenge for small businesses, but it is not impossible. As long as you have a good financial history, have been in business for a few years, or are willing to personally guarantee the lease, you should be able to borrow all the equipment you need. The best way to find out more is to get in touch with a lending company and explain your situation.

You will be allocated an account manager, who can take you through the application process and help you increase your chances of getting a great deal. They might speak to you about the kinds of financial documents you need to provide and how much equipment you can expect to borrow. Call us today at Noreast Capital to find out more and open your lease line of credit.

Can You Lease Office Equipment?

Setting up or expanding an office-based business can be extremely costly, because you have to pay for all your equipment on top of the rent and general moving costs. For this reason, a great number of companies use office equipment leasing to finance the purchase of new items. This process is available for almost everything you need, from furniture to electronic devices to software.

Leasing can be a great option for many small or medium-sized businesses. If you’re starting from scratch, you can minimize your initial costs and the amount of debt you accrue from the start. Slightly larger companies that want to expand can do so at a small upfront cost by leasing the additional equipment. There are many different types of contracts available, so you’re sure to find something that suits your individual needs.

What Equipment Can You Lease for Your Office?

When you think of an equipment lease, you might imagine office furniture or maybe specialized electronic devices. However, you can purchase almost everything you need in this way, including virtual components like software. As a result, you only have to spend money on your space and your employees when setting up your business, and you can pay for the rest over time or when your investment has started to become profitable.

While you can go to the firms that sell the equipment you need, speaking to a direct lender like Noreast Capital could have many benefits. By working with us, you can get all your items from the same place, and you don’t have to spend time filling out a large number of applications. Because you’ll have a dedicated professional assigned to your account, there will be continuity, and we can personalize your service as we get to know your needs.

Furniture

Office furniture can be expensive, especially when you need to buy large quantities of it all at once. In addition to desks and chairs, you might need items for a media room, a setup where your employees can relax during their breaks, and pieces of furniture that allow you to hold large meetings. What’s more, your business might have specific needs depending on the shape of your space and the type of work you do.

At Noreast Capital, we can offer you a lot of choices when it comes to furnishing your office. You can lease exactly the type of product you need from us without paying for it all upfront. Once you’ve made your choice, we can discuss what kind of office equipment leasing is best and whether you will start to pay it off right away or delay payments until your business is profitable.

Electronic Devices

Although you might need furniture in large quantities, each piece will be relatively cheap. In contrast, electronic devices such as high-quality photocopiers, scanners, computers, or telephones can be extraordinarily expensive. When setting up your office, you’ll need to make sure you get up-to-date devices, which further increases the cost of your equipment.

By choosing a lease, you can spread out the cost over several years. Our most popular lease term is 36 months because it gives your business plenty of time to increase its revenue and make the investment worth it. Your employees will benefit from the high level of productivity that modern electronic devices allow, so you’ll be improving your bottom line without the initial cash outlay that would be necessary otherwise.

Software

Many of the business owners we work with are surprised that we also offer software leasing. If you need software for accounting, advertising, graphic design, business management, scheduling, or inventory and supply chain management, we can help you out. Like electronic devices, purchasing these products upfront can be very costly, so you can benefit from delaying the price.

What’s more, you might be able to upgrade more regularly because you can decide to sign a new lease once your term is up. If you go for the average 3-year term, this means that you’ll always stay on top of the newest technology.

Who Can Benefit from Office Equipment Leasing?

You might wonder if equipment leasing is the right choice for your firm. Isn’t it more expensive than purchasing everything outright? The answer is that it depends on your business and the type of lease you choose. Because the purchase is delayed, you keep your cash for longer and can therefore reinvest it in your operations. If your company is profitable, this can lead to much higher revenue, so the slight extra cost of your lease is more than worth it.

What’s more, most small and mid-sized businesses don’t have an excess of capital to spend on office equipment. Thus, they would have to borrow money from a lender, such as a bank, if they wanted to purchase the items upfront. The interest rates of these kinds of loans can be higher than your lease, so it doesn’t make any sense to choose this option.

Startups

Many of the companies we work with are startups, so they are in the process of setting up their first physical space. As such, they usually have limited funds available, and these are better spent on building up the business and hiring highly qualified employees. We offer several leases specifically designed for young companies who might not yet have the revenue to pay for all the equipment they need.

For example, you could delay payments for the first few months and therefore get set up without having to immediately spend money. There is also the option of starting with a lower fee and then gradually increasing it as your profit margins widen. The professional working with you will take you through the possibilities and help you decide which one is suitable for your startup.

Small or Medium-Sized Businesses Looking to Expand

The other main reason why businesses seek us out is that they are planning a major expansion. If you’ve been successfully running your office for many years, it might be time to open a second branch or expand your existing premises.

This is much more achievable when you don’t instantly have to spend money on equipment. By working with us, you could expand your business and increase your profits much faster, thereby creating the cash flow you need to easily keep up with your lease payments.

Seasonal Businesses

Not all companies operate year-round, and you might get paid much more during one season than during another. For example, accounting firms often see a great influx of customers during tax season, whereas their profits may decline once these busy months are over. It can be hard for such businesses to keep up with all their payments year-round, which is why there is a specific type of lease created just for them.

Seasonal payment leases match the cash flow of your business, so you pay off the bulk of your equipment during the peak months, and your payments are significantly reduced during the off months. This could make it much easier for you to meet your commitment and to survive when profits are lower.

Businesses Who Have Varying Needs

Because your company is always expanding and changing, your needs may not remain the same for very long. If you purchase expensive equipment, you expect it to last for at least 5-10 years, but after that time, it might no longer suit your requirements. Office equipment leasing can help you to remain much more flexible and to switch out your assets more frequently.

For example, you might know that you’ll want to rebrand your business in a year’s time. In such a situation, you could get a 12-month lease and then exchange your items for ones that better fit your new image. What’s more, you might be working on a project that requires certain types of equipment, but once it’s over, you no longer need these things. With a lease, you can simply give them back at the end of your term and your payments for them will stop.

Businesses Unsure About the Future

Finally, not all business owners are sure whether they will operate in the same way in future years. For instance, you may want to attempt an expansion for a year but have the option to amend or give up the plan if it doesn’t work out. Getting a lease could be your way of experimenting with different options without making a commitment that is hard to back out of.

You could go for a flexible contract that allows you to either keep your items at the end or give them back to us, depending on how things work out. That way, you don’t have to project too far into the future, and you can take things one step at a time.

Get the Equipment You Need

There are many benefits to a lease. Small businesses can get started with a much lower amount of capital, and mid-sized companies will be able to expand at a much faster rate. Any profits you make can go directly back into the business, and you don’t have to spend them on new equipment. Call or message us at Noreast Capital to find out more about the leases we offer. No matter the size of your operations, you’re sure to find something suitable.