Equipment Leasing In The American Economy
An equipment lease program is like a loan, where the lender buys and owns a piece of equipment, and they rent it out to another business for a specific period of time. The business pays a set monthly payment amount for the duration of the equipment leasing term, and they have the option to purchase it at fair market value at the end. Equipment finance and leasing programs also gives businesses the option to continue leasing, to trade the machinery in for a new piece of equipment, or to simply return it. Equipment leasing is appropriate for many different types of businesses, at any stage in their development. Leasing can also finance the soft costs often associated with equipment purchases, such as installation and training services.
Even a business that has just started and has little credit or funding can often enter a low-end equipment lease program of less than $100,000 and easily make the monthly payments. In this case, though, the business owner would have to use their personal credit to qualify for the equipment leasing. There are literally billions of dollars available for equipment finance and leasing throughout the nation, since individual and institutional investors put a lot of money into this capital market. Equipment leasing companies often use these funds to help small businesses get equipment that they need, so people see it as a good investment. With more and more money, leasing companies are flush with capital. As a result, they are eager to do business and stay ahead of the competition by offering lower equipment lease program rates. These low rates are good for small businesses, and good for the leasing companies that get their business.
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