- 2 May 2014
- Posted by: Lucinda
- Category: Asset Finance and Leasing
Asset financing, also known as lease financing is on the increase in 2014, and it’s not hard to see why. Leasing is a more flexible way of financing assets, offering business owners a way of obtaining machinery and equipment without a huge capital outlay. Leasing allows a business to maintain its cashflow and doesn’t eat into working capital, so it’s ideal for business owners who don’t want the burden of buying all their assets outright.
In recent years, lease financing became harder to obtain, but now funders are approving more lease-finance deals, and the trend is set to continue upward in the coming year.
Leasing has several advantages over buying. The obvious one is that you don’t have to pay the entire cost of your assets upfront – leasing spreads out the cost over a number of years, usually a fixed amount that can be easily factored into the annual budget.
Often, the leasing company will remain responsible for maintenance and repair of the equipment – and after a few years, the assets can be returned to the leasing company and exchanged for newer, up-to-date equipment. No one wants to be left owning an asset that’s become obsolescent or out of date – leasing ensures your machinery and equipment is always state-of-the-art.
It’s not just heavy plant machinery or truck fleets that can be obtained through lease financing – smaller businesses can get fitted out with computers and office equipment through leasing. So if you’re looking to invest in new equipment to get your business up and running, you should be looking at lease financing to provide the necessary funds.
Many business owners, however, are not fully aware of the funding options open to them, so may miss out on the opportunity to avail of lease financing. With cashflow still a big consideration for many businesses, it pays to be aware of what’s available.