Leasing is used for a variety of equipment purchases such as, heavy machinery, construction equipment, farm equipment, office equipment, etc. Since certain equipment depreciates rapidly, leasing can be more cost-efficient than ownership. Some advantages to leasing include:
- leasing can be provided for up to 100% of the equipment costs
- certainty of fixed rates for full term;
- conserves working capital for other purposes;
- predetermined purchase option or renewal privileges, etc.
Equipment leasing companies provide a valuable service in the business world. By leasing equipment rather than selling it outright, companies can often avoid the expense of a major down payment by obtaining the necessary equipment from these leasing companies. The leasing arrangements may be for a short duration or may last throughout the projected useful life of the equipment. Equipment leasing companies prorate the total cost of the equipment and any additional interest and handling charges to match the actual cost of providing that equipment to the company for the duration of the lease. Just as with consumer auto purchases, a significant percentage of the value of construction and business equipment is lost at the time of sale or transfer. Short-term leases of new equipment can sometimes cost more than longer-term agreements because the leasing company must recoup the loss in value of the equipment more quickly.
CNF Exchange can help businesses find the right financing solutions for equipment leasing arrangements. The online interface allows these companies to upload their funding requests conveniently and quickly for evaluation by a number of investors at the same time, allowing a greater degree of choice in financing a wide range of business and construction equipment needs.