Do you need equipment for your business? Whether you need new equipment to take advantage of an opportunity or to replace broken or obsolete equipment, it is important to understand the options available today.
For years, equipment leasing has been the go-to option for business owners who want to avoid the large upfront cost of purchasing equipment. However, online loans have quickly become a popular choice for those who want the benefits of owning equipment without the initial cost. This new form of financing allows business owners to get funding for any equipment they need without the collateral, lengthy application, and delays associated with securing a bank loan.
Below is an overview of the advantages of each option so you can make the right decision for your business.
Equipment Leasing vs Online Equipment Loans – What is the Difference?
An equipment lease is basically a rental agreement between a lessor and a business in which the lessor lends the equipment in exchange for regular payments. Equipment leases can be obtained directly from an equipment manufacturer or independent equipment leasing companies.
An online equipment loan is a business loan obtained online for the purpose of purchasing equipment. This new form of financing allows you to purchase equipment outright and repay the lender through fixed payments. Unlike traditional bank loans, online loans can be approved within 24 hours, do not require collateral, and offer flexible terms.
Advantages of Equipment Leasing
- Flexibility – Leases can vary in length, down payment, and payments. However, you are limited to the equipment inventory of the provider.
- Relatively Low Upfront Cost – While a down payment may be required, the amount is much less than the value of the equipment.
- Updates – For equipment that needs to be replaced, repaired, or upgraded often, you can stay up-to-date without committing to ownership.
- Tax Benefits – Lease payments are tax-deductible.
Advantages of Online Equipment Loans
- Flexibility – Online loans vary in length and can be used for any type of equipment you need to grow your business.
- No Upfront Capital Needed – Any processing or origination fees are either added to the loan balance or taken from the loan disbursement.
- Lower Overall Cost – Using an equipment loan to purchases equipment almost always cost less than a lease over time.
- Builds Equity – You can build equity and sell the equipment at any time.
- Tax Benefits – Any interest on your online loan is tax-deductible.
- Customization – As the owner of the equipment you are free to make any alterations or customizations to suit your business needs.
Should you Lease Equipment or Get an Online Equipment Loan?
Over the years equipment leases have been seen as the only way to get equipment without a lot of upfront capital; however, online loans for equipment, such as those offered by Lendified, are an attractive alternative for business owners and often make the most business sense.
When considering the path you want to take, make sure to understand the true cost of your options and the return on investment you expect from the equipment. At Lendified, we allow you to pre-qualify for an online loan in minutes by completing a simple online application. What are you waiting for? Apply now and see if an online equipment loan can help you get the equipment you need.