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It's almost always a good idea to seek lease financing for your business equipment. Don't tie up any of your available working capital by paying cash for equipment if financing is available. It's much easier to get a collateral based equipment lease than it is to get a non collateral based working capital loan. Some of the reasons why roughly eighty percent of U.S. businesses lease their business equipment are that leases generally don't require a down payment, there are significant tax benefits, and that the payments are fixed and don't fluctuate when like they would if you used a bank line of credit.

These reasons aren't foreign to many business owners, but sometimes business owners have a hard time making sense of what their real qualifications are. Next time you decide that a particular lease deal is too costly, think again.

There are many factors that will have an impact on the type of lease deal you qualify to get. The funding sources that provide lease financing look at many aspects of your business including but not limited to the following:

--When your company was established (the longer the better).

--The type of equipment you are seeking to lease (is it easily re-marketable & how easy is it to track down in the event you default).

--What is the personal credit scores of any of the owners that have a 5-20% or more stake in the company?

--What do your business bank statements look like? Is there enough money to substantiate your current bills AND the new equipment?

--Do you have a footprint in the business credit community (a Dun & Bradstreet rating)?

--Some times business and personal tax returns are required. How does your last two years look?

Remember, these are some of the basics and there is much more that goes into a funding sources decision to cut a check to the vendor you wish to buy your equipment from. Let's just say that if you don't have many of the items mentioned above working in your favor, there still may be finance options for you, but due to the inherent risk it won't always come with the lowest payments (like what would be available to a company that had perfect credit (business and personal), 10 years in business, bank statements that easily substantiate the new debt, etc.). Again, the good news is that you still may be able to finance it. You don't need to shell out all your cash to get your new equipment and you can use your cash for things that you can't finance like insurance, payroll, gas & other supplies.

If you find yourself being disappointed that you may not be getting the lowest rates available, think about it like this; what kind of tax benefits will I see by leasing this equipment? Also, whatever the payments may be, ask yourself the following: am I going to make more money with this equipment than what it cost me? If the cost of the equipment is more than you'll realize after the payments are considered, maybe now is not the right time to acquire the equipment. If you are making more money than what the equipment cost you monthly, then good for you. That's why you are in business, right.

No right-minded businessman would buy equipment that doesn't add value to their bottom line. Next time you find yourself saying to yourself that this equipment lease financing cost too much, think again. The real question is, how much money can this piece of equipment generate for my company? The emphasis should be on the additional revenue generated and not the cost. The cost is just a means to the end-more money.

Shawn Vaillancourt

About Vitality Finance Group

We pledge to place each lesee with the best possible program they currently qualify to get. Call life ins quotes @ (877) 834-3247 to see how we can help with your equipment financing needs OR check us out on the web at www.VitalityFinanceGroup.comwww.VitalityFinanceGroup.com

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