More small business owners are turning to equipment leasing, and for good reason. While the initial cash outlay required to purchase equipment can be a burden, leasing offers a more appealing alternative with several unique benefits.

Leasing Equipment Is Debt-Free

Purchasing equipment typically requires taking out bank loans, which adds debt to your balance sheet. These loans must be repaid over several years, and the cycle repeats when it’s time to upgrade or replace equipment. Leasing, on the other hand, allows you to avoid unnecessary debt. Monthly lease payments are manageable and don’t strain your finances.

Keeping Up With Technology

Technology evolves quickly, and most equipment has a lifespan of only about three years with regular use. When purchasing, outdated equipment must be sold off at a loss, and new loans are needed to cover replacements. Leasing eliminates this issue entirely. You can easily upgrade to newer models as they become available, ensuring your business always has the latest and best tools. This is especially beneficial for businesses that rely heavily on specialized equipment to meet customer needs.

Tax Benefits of Leasing Equipment

The tax benefits of purchasing equipment are limited. In the year of purchase, the IRS allows a deduction for the total cost, followed by a bonus deduction of half the cost the next year. After that, businesses must follow depreciation charts until the equipment is fully depreciated. In contrast, leasing allows you to deduct monthly payments without worrying about depreciation. While there is a $500,000 cap on equipment deductions, leasing still offers substantial annual savings for small business owners.

Learn More About Leasing Equipment for Your Business

LMC Alternative Business Capital provides comprehensive leasing programs for businesses across all industries. Contact our team today to get started and discover how leasing can benefit your business.