Lease
The brands and manufacturers in our stock include:
Asamil, AEM, Alberti, Allied Blower, Automac, Brandt, Biesse, Bretti, Brico, Bridgewood/Unimac, Busy Bee, Cantek, Canwood. Comil, Cefla, Costa, CNC, SCM, Holz-Her, Homag, Holzma, Homag, Hitachi, Jepson, Jet, JLT, Murphy, Newton, Nissan, Northfield, Olympic, Rogers, Rockwell, Schelling, Selco, SCMI, Tatry, Taylor, Tenka, Torit, Uhling, Uniholz, Virutex, Vitap, Weather-Rite, Westvaco, Weeke, Woodma, etc.
The type of machines in our stock include:
- dust collectors,
- edgebanders,
- nesting routers,
- saws, panel saws,
- molders,
- sanders,
- cnc routers,
- shapers,
- dryers,
- etc.
Lease Vs. Own
Author: bill smoyer
Owning equipment vs. leasing equipment is always an important business decision. Each firm or company is faced with different set of financial constraints which will impact their decision. Market fluctuation in the specific industry often helps aid the decision.
There are several factors that can be considered when buying vs. leasing equipment. This can be decided by considering rental or machine costs per day as well as number of days the machine will be used. Consider the acquisition cost, depreciation rate and cost per year, and resale. Finance amount, length, and rate to be computed of the lease or purchase. Also, transportation and maintenance cost associated with the operations of the purchase.
There are advantages to leasing equipment such as a much lower initial expense. Initial cash flow can be significantly less due to common less down payment money. Lease payments are tax deductible also. The payment terms can be very different between leasing and owning. Often the leasing route can yield more lenient terms. In an industry that is rapidly developing and constantly requires new machinery leasing may be a better choice. The resale on something such as electronics when new technology is being developed is often very low. Buying a piece of equipment that constantly needs to be replaced is often not a good business endeavor. Maintenance of the leased or rented equipment often saves money due to the rental companies requirements to fixing the problem.
On the contrast there are obviously flaws or disadvantages to a leased piece of equipment. The initial cost may be less to lease but the long term cost of leasing is usually higher then loan to buy. And instead of using the tax deduction that comes along with the lease of the equipment there are incentives for newly acquired assets. Signing into a new lease can put large restraints on the requirement to see out the lease term. This may force you to continue leasing due to the fact that at the end of the lease the equipment is not yours. They can offer lease to own terms which can be good for a young business that need the liquidity of cash on hand.
Buying equipment obviously has its disadvantages as well that include the higher initial cost. As stated with the advantage with leasing, buying equipment puts you in a situation of owning the equipment. Often the depreciation with certain types of equipment is very large and the salvage value of the piece is very low. This can be due to several reasons including advancement of the product or very high wear on the machinery.
The major advantage of owning the equipment is the fact that the equipment is actually yours at the end of the loan term or purchase. You can do what you choose with the equipment. Along with this can come more or less investment capital. When initially purchasing the machine the demand for the constant uses of the equipment may have been necessary. Often natural swings in the economy and changing industry trends may lead to lack of necessity of the machine.
There are issues that must be considered when there is an acquisition of a new form of machinery. There is no right or wrong answer to the question of lease vs. buy. Each company must decide what is right for the job requirements. This can be done using simple accounting style formulas to find which form of equipment acquisition is best for your firm.
Works Cited
About the Author:
Article Source: ArticlesBase.com - Lease Vs. Own
An Introduction to Leasing and Asset Finance
Author: John Mce
Confused by the types of finance available to your business? Want to expand your operations but don't have the liquid capital available to invest in things like equipment? If so a leasing agreement could be right for your business.
How does it work?
Essentially all leasing agreements work on the principle of renting an asset from a third party, usually a financial institution, for a fixed period. This type of contract is typically referred to as a lease.
Leasing plays a big part in the property market where properties are leased out to tenants. However leasing is also a popular way to finance business growth or deal with financial difficulties.
Typically the lease agreement will work as follows;
- A business requires a new asset (for example a factory needs an expensive new machine)
- The factory reaches an agreement with a lessor
- The lessor buys the new machine from its seller
- The lessor rents the machine out to the factory for a fixed term as defined in the lease agreement i.e. 2 years.
- At the end of the lease term the factory either returns the machine or renews the contract with the lessor.
Why use leasing as a form of finance?
Leasing improves cash flow for companies as expensive outgoings like purchasing equipment are offset by the lessor and the company only pays a rental fee. Although this fee will typically be more than the relative cost of purchasing the asset outright, the cost is spread over manageable rental instalments.
Unlike a loan many lease agreements are not regarded as a debt but as an expense. This is more favourable to a business entering other credit agreements where the stronger a credit position the business is in the more eligible they will be for preferential rates and higher lending.
As an asset is not owned by the business but by the lessor the residual cost of owning aging assets such as machinery are offset. This means a business can upgrade once an asset reaches obsolescence without the cost involved with selling or disposing of the aging asset. This is most effective in cases such as IT equipment leasing where technology companies want to stay up to date with their IT infrastructure without the continual cost of degrading IT kit.
Problems with leasing
As mentioned, leasing can be an expensive way to raise finance, often more than other routes including loans and always more expensive than buying an asset for cash as the lessor themselves need to make their own profit.
Lease contracts will often tie businesses into a fixed term meaning if circumstances change the business will still need to keep up lease payments.
As when leasing the business does not own the asset, when valuing a company, for example during a buy-out or merger their will be less material assets to base a valuation on.
Is leasing the right finance option for my business?
Our best advice is to consult financial specialists prior to entering any lease transactions.
About the Author:
John Mce writes for the Commercial Finance People, who specialise in the placement of candidates in executive and management level positions within Invoice Finance, Asset Based Lending, Asset Finance / Leasing , Commercial banking, Corporate banking and Business banking, working with a wide variety of organisations based throughout the UK.
Article Source: ArticlesBase.com - An Introduction to Leasing and Asset Finance
