What is Equipment Leasing and How Can it Benefit My Business?

Equipment is most likely one of your businesses most important assets. From the computers in your office to the special machinery and vehicles you use to operate, as your business grows, your equipment needs to grow as well.

Of course, purchasing said assets can be incredibly expensive. Equipment leasing is a cost-effective way to get the tools you need to keep expanding your business and is a viable option for small and mid-sized businesses.

How does equipment leasing work?

According to the Equipment Leasing and Financing Association, 78% of U.S. businesses  across all industries rely on financing equipment purchases through loans, leases and lines of credit.

Here are a few examples of equipment that can be financed or leased for your business:

• Farming or manufacturing machinery
• Business vehicles
• Major restaurant appliances (oven and ranges)
• Construction equipment
• IT equipment (software and computers)

When you choose to lease equipment , you are not buying it outright, as the U.S. Chamber of Commerce explains. The lender that provides financing will own the equipment and you are essentially paying them to use it for a set period of time. This method usually doesn't require down payments or collateral, so it can be a more affordable option than equipment financing or loans.

Construction equipment is commonly leased by businesses.

Benefits of business leasing

The main benefit of leasing equipment for your business is saving money by avoiding depreciation costs. As Business New Daily points out, buying and maintaining equipment is expensive. As soon as you begin using it, it loses value, and it's only a matter of time before a new version comes out that is more efficient.

When you own equipment, your business is absorbing these costs, and it's simply impractical to purchase the newest, best equipment every few years. With leasing, you won't be stuck with obsolete equipment. After your lease is up, you can upgrade to the latest available version. 

This is also a great option for businesses that need more equipment to handle a higher volume of work and increase their profits. Instead of having to sell or maintain your existing machinery or assets to accommodate new tools, you can just switch them out at the end of each leasing period. Take the time during your lease to think about what equipment or updates you might need during your next period.

You don't need to sacrifice the growth of your business due to the high cost of new equipment when you choose to lease, rather than own, eligible assets.

Try equipment leasing with Vectra Bank

At Vectra Bank, we understand that growing your small business takes time and resources. Our leasing and financing plans* help you avoid the obsolescence of "owned" property through our affiliation with Zions Credit Corporation. In the face of rising costs associated with expanding your business, leasing can pump new life into your operating capital and improve profits.

Each of our customized leases offer 30-60 month terms and have unique benefits. To learn more about the equipment leasing and financing options provided by Vectra Bank, reach out to one of our local representatives today.

^{*Equipment financing and leasing are subject to credit approval. Certain criteria apply. See a specialist for details. Equipment financing and leasing are offered through Zions Credit Corporation, a subsidiary of Zions Bancorporation, N.A.}